Rua Bioscience Limited — Investor Presentation 2021

Aug 26, 2021

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Shareholder Update
August 2021
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Nau mai haere mai, welcome to Rua Bioscience

Rua Bioscience listed on NZX in October 2020. This is the first in a regular series of newsletters designed to keep you up to date with the latest information and developments from Rua. As well as being a recap of our top stories, we hope you’ll find other information that will give you insight into the market in which we operate, and the way we conduct ourselves as a company committed to creating cannabinoid-based medicines that change people’s lives from right here in Te Tairāwhiti.

We hope you enjoy reading this newsletter and, if you have any feedback, please let us know. You can email us at info@ruabio.com

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Thanks for joining us.
Ngā mihi nui,
Rob Mitchell
CEO, Rua Bioscience
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Image - Callaghan Innovation scientist working with current hyperspectral technology. Rua hopes to develop a mobile version of this technology for use in the field in real-time without destroying any product.

Rua Developing Industry-Leading Agritech with University of Waikato

Rua and our development partner, the University of Waikato, recently announced a ground-breaking, two-year research programme to investigate the application of hyperspectral technology to the cultivation and assessment of medicinal cannabis, paving the way for Rua to enter New Zealand’s booming agritech sector.

In simple terms, the technology would provide a means of scanning the cannabis flower, immediately providing information on the plant’s chemical makeup as well as the presence of any pests or disease. Our expectation is that this will enable growers to identify both crop management issues and optimal harvesting times.

Primarily driven by global demand for medicinal cannabis, commentators expect the cannabis testing industry to be worth around $2.5bn (US $1,806 million) by 2025[1] . Current analytical methods for product testing present significant challenges for commercial cannabis growers. Testing requires the destruction of product, is expensive, and the turn-around time for results delivery means there can be significant delays to decision-making.

Our researchers anticipate real-time monitoring using hyperspectral imaging will change all that, with the potential to transform the way the global medicinal cannabis industry qualifies, assesses and manages its crops.

At the end of our two-year proof-of-concept project, we hope to prototype an automated, near-infrared imaging system that will enable the on-site assessment of individual cannabis plants in real-time without destroying any product.

We expect it’ll revolutionise our internal cultivation practices (and by owning the IP for the cannabis industry) position us well to develop and market world-class agritech for the global cannabis industry - enhancing Rua’s competitive position and contributing to future revenue opportunities.

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Getting to know the German Medicinal Cannabis Market

The German market is Europe’s most mature medicinal cannabis market and currently the largest single market for GMP (pharmaceutical) grade cannabis globally, with regulations enabling physicians to prescribe medicinal cannabis at their discretion for a range of conditions. In addition to these broad prescribing rights, medicinal cannabis is also reimbursed by the German Statutory Health Insurers for a number of conditions, improving affordability.

Rua Bioscience CEO, Rob Mitchell, explained the importance of Germany to Rua in the following way. “In order to generate revenue as quickly as possible for Rua, we intend to make sales of our cannabis through wholesale exports of pharmaceutical grade dried flower into Germany. In March 2020, we signed a supply contract with German distributor Nimbus Health. Nimbus is a significant player in the German market - it’s a leading supplier of pharmaceutical-grade medicinal cannabis products for patient prescriptions. In March we successfully completed our first trial export to Germany, testing our packaging and export processes by sending 70g of dried flower to Nimbus”.

The German market for medicinal cannabis products continues to rapidly grow. In the year ending 30 June 2021, 313,500 prescriptions for medicinal cannabis products were reimbursed for German patients, valued at €177m ($298m)[2] . These reimbursed sales are complimented by a substantive private paying market with an estimated additional value of €100m ($169m). Since use of cannabis for medicinal purposes was legalised in 2017, 60m patients have received treatment for a wide range of conditions.

Pain is the most common indication for which medicinal cannabis is prescribed in Germany and, together with spasticity and anorexia, makes up 90% of all prescriptions.

Mr Mitchell says he’s pleased to see the German market remains as robust as predicted.

“Manu Caddie, (Co-founder of Rua Bioscience) and the team from New Zealand Trade and Enterprise put a great deal of effort into exploring Rua’s export options, and the team is working diligently to make product available for the German market. It’s been a long road, but it’s encouraging to see the German market continues to show robust growth” , Rob says.

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GMP Certification What is it and why is it important?

Good Manufacturing Practice (GMP) is an important phrase in the medicinal cannabis manufacturing industry, and one you’re going to hear a lot as Rua and our fellow medicinal cannabis businesses prepare to bring product to market.

GMP is a globally recognised set of minimum standards that describe the systems that manufacturers of medicines must have in place to ensure their products are consistently safe, effective, and of acceptable quality. GMP certification of Rua’s facilities and products is a prerequisite for commercial production, and resulting sales into local and global markets.

Once GMP is secured, we’re given the green light to manufacture product. But GMP is issued on a product-byproduct basis. So, every time we want to introduce a new product to market we must go through the same process. Each time though, the process is less onerous as many of the things we do and have to manage are common to most medicines.

While GMP is a significant milestone, it’s not the only process we must go through. After GMP, each product requires the submission of a New Product Application and must go through Ministry of Health’s Quality Standard assessment.

The process seems long, for Rua – two years in the planning and nine months in the formal audit process. But it’s mandatory for all pharmaceuticals and something we were aware of from the outset. As mentioned, we aim to have product for New Zealand patients by early 2022.

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CEO Spotlight on the New Zealand Medicinal Cannabis Scheme

There has been a lot of media and public interest in New Zealand’s Medicinal Cannabis Scheme and what improvements are needed for our evolving industry. While Rua’s major commercial focus is on the development of global markets, we have always been committed to supporting a sustainable sector here in Aotearoa. As such, our position has been consistent and worth exploring for all shareholders.

As you’re probably aware, the Scheme took effect from 1 April 2020, and improved patient access to cannabinoidbased medicines by allowing GPs and registered prescribers to prescribe products for any ailments. It also enabled a dynamic new industry; companies such as Rua pioneering this emerging sector.

What might surprise you is that, in the pharmaceutical world, it can take companies 10-15 years to bring a product to market. Like many in our industry, Rua anticipates having product for New Zealand patients in the first half of 2022; just two years on from the launch of the Scheme. That in itself should be celebrated. It is a testament to the tenacity of industry pioneers and a regulatory framework which considers the needs of both patients and the industry.

But we believe a profitable, sustainable and patient-focused New Zealand industry could be hugely encouraged by some simple regulatory changes over the next six to 12 months.

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Our top five industry gamechangers:

1. A subsidy for cannabis-derived medicines, which, taken in context of New Zealand’s drug framework, we believe would enhance affordability and enable widespread access amongst patients.

2. Provisional consent to medicines with Phase 1 and 2 clinical trial data. This would permit some marketing to healthcare professionals.

3. Low-dose CBD (which has a low risk profile) should be made available over the counter at pharmacies only.

4. ACC and MSD should fund all legitimate Medicinal Cannabis prescriptions for their clients.

5. We would like the Government to recognise the standards and requirements of each export jurisdiction on a case-bycase basis.

While we continue to develop our export-led strategy, we believe we are stronger together. So, we will continue to advocate on behalf of our industry, shareholders and New Zealand’s growing number of medicinal cannabis patients.

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Dates of Interest Nga ra whakahirahira

19 August Director Nominations opened 30 August Annual Results released 6 September Director Nominations close

Navigating our Year End

This time of the year can be a busy one for shareholders, with lots of information shared by companies.

Above, we’ve included some dates of interest, but there’s a couple we’d like to explain in more detail.

30 August, we’ll release our Annual Results. This will include a full set of audited financials for the 12 months ended 30 June 2021 accompanied by high level commentary on our operational and financial highlights for context. In accordance with our disclosure obligations, we’ll have this up on the NZX and Rua websites. You should also get an email from us via the team at Computershare. At 11am, Rua will host a conference call for all interested investors at which our CEO and CFO will talk through the results. You’ll find the link to register to the right.

17 September, we’ll formally advise you of the Annual Meeting. Your Notice of Meeting includes the agenda, the links for attending online, the resolutions, voting instructions and your voting papers. On this date, we’ll also make our Annual Report available. This will give you much deeper insight into the company, our achievements for the year and our aspirations into the future. Again, we’ll have this up on the NZX and Rua websites. You should also get an email from us via the team at Computershare. Those who have elected to have a physical copy of the Annual Report will have theirs posted out.

Notice of Meeting and Annual Report released

17 September

27 September Community Roadshows in – 1 October Te Tairāwhiti 17 October ASN Proxy Voting closes 19 October Annual Shareholder’s Meeting

Tuhono Mai

Accessing Rua’s Annual Results Conference Call. Rua Bioscience will host our Annual Results Investor conference call at 11am. Management will review the FY21 results and discuss the Company’s performance and outlook.

You can register for the call at: https://s1.c-conf.com/ diamondpass/10015791-mas1pa9.html. You will receive the dialin number and personal pin upon registration, allowing direct entry to the call. A calendar invitation will be emailed together with a reminder email prior to the call.

If you do not pre-register in advance then, at the time of the conference, you can:

Dial:

Auckland................... 09 929 1687 Provide conference ID:10015791 Christchurch............. 03 974 2632 * We recommend dialling Wellington................ 04 974 7738 in 10 minutes prior to the scheduled call time.

19 October is the date of our Annual Meeting. This is a hybrid meeting hosted in Gisborne with the option to attend and interact online. The Annual Meeting presents a great opportunity to meet the team kanohi ki te kanohi (face-to-face) to get a real sense of the Company and those driving the kaupapa. As mentioned, all your instructions will come with the Notice of Meeting in September, and we hope we’ll see you there.

Rua Recruits CCO with global pharmaceutical and biotech experience

In May, Dr Andrea Grant took up a pivotal role with Rua as Chief Commercial Officer (CCO).

Dr Grant will drive our domestic and global commercialisation and business development strategy, her first priority to lead Rua’s global expansion into key markets.

Dr Grant brings 20 years of business development experience in the pharmaceutical and biotech industries globally. Dr Grant comes to Rua from Janssen Cilag Pty NZ (the pharmaceutical business of Johnson & Johnson), where she was the Market Access Manager responsible for commercialising innovative medicines to NZ patients.

Her global experience in biotech includes senior business development roles at Incyte and Galapagos, both during their early stages of transitioning to fully integrated pharmaceutical companies, as well as Management Director of Living Cell Technologies.

Dr Grant will also add value to Rua’s global commercial discipline, her experience garnered from working with pharmaceutical stalwarts like Janssen and Roche.

Rua Bioscience CEO Rob Mitchell says, “Andi is an exciting hire for the company as we prepare to enter both the German and domestic markets and develop our IP strategy across the medicinal cannabis value chain.”

Andi has carved out an outstanding international career focused on the commercialisation of medical innovations in the pharmaceutical and biotech sectors across the UK, Europe, USA, NZ and Asia.

“She’s a proven value creator, skilled negotiator and vastly experienced leader who knows how to bring novel products to market. She is also a great fit for Rua’s unique vision and kaupapa,” he says.

Dr Grant says she’s thrilled to join Rua Bioscience.

“Rua’s long-term vision to become a fully integrated pharmaceutical company is eminently achievable, especially given the company’s laser focus on driving revenue that we can reinvest on securing IP” she says.

In my view, Rua is the most advanced New Zealandbased medicinal cannabis company in regards to product development progress to date, as well as its ability to commercialise its assets and IP.

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Ngā Uara

At Rua, we operate with a simple but important set of values:

These pou underpin everything we do as a successful, sustainable, and trusted partner that creates value for our people, communities, shareholders, and other stakeholders.

Ponotanga

We value diversity and act with integrity.

Mauitanga

We’re future-focused, celebrating courage, curiosity and innovation.

Oranga

We’re passionate about the health of whānau and our whenua.

Whakawhanaungatanga

We collaborate for success.

Get to know us

Looking for the latest information?

Our vision at Rua Bioscience is simple – to create cannabinoid based medicines that change people’s lives.

We’re focused on becoming a leading producer of medicinal cannabis formulations for patients around the world. We have a social mission that sets us apart – creating sustainable economic opportunities for the people of Te Tairāwhiti.

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Following the NZX listing rules, the NZX website is the first place we make all required announcements to the market. Here we first release information including our financial results and Annual Report, director and senior management changes, meeting notices, market updates, major transactions... a range of things it’s important shareholders know. It’s worth visiting regularly - www.nzx.com/instruments/RUA.

You can also keep up to date with our performance and all the latest company news by following the company online via:

facebook.com/ruabioscience

linkedin.com/company/rua-bioscience

instagram.com/ruabioscience

Manage your shareholding

Computershare maintains Rua Bioscience’s share register. If you have any questions about your shareholding, please contact the Computershare team on +64 9 488 8777 or email them at enquiry@computershare.co.nz.

To contact Rua Bioscience, please email us at info@ruabio.com

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References

1. Markets and Markets, 2021.

2. Market Data Report – The German Cannabis Market – Q2 2021