WILLOW BIOSCIENCES REPORTS THIRD QUARTER 2023 FINANCIAL RESULTS AND PROVIDES CORPORATE UPDATE

Record revenues for the third quarter and the nine months ended September 30, 2023

Patent application filed for a process to produce corticosteroids at an expected significant cost reduction to current manufacturing cost

Signed two new program agreements, and advanced three programs to the next phase of development toward commercialization

SUNNYVALE, Calif., Nov. 14, 2023 /PRNewswire/ - Willow Biosciences Inc. ("Willow") (TSX: WLLW) (OTCQB: CANSF), a leading biotechnology company focused on revolutionizing industrial manufacturing of pure, consistent, and sustainable functional ingredients, today released its financial and operating results for the three months ended September 30, 2023, reporting record revenue and further progress in its commercial expansion.

"The third quarter was marked by significant progress on our strategy to sustainably grow the business by increasing the number of partnered-funded opportunities while reducing our operational expenses", said Dr. Chris Savile, Willow's President & CEO. "The excitement in the industry around our BioOxiTM program and its potential to transform the multi-billion dollar steroid market has led to negotiations on multiple new programs that are expected to close in the first half of 2024. These programs are expected to generate both near-term R&D revenue, including up-front cash, and longer-term upside through milestones, royalties, and ingredient supply without the need for significant internal investment," continued Dr. Savile.

Third quarter and recent corporate highlights

• On July 20, 2023, Willow announced our savory food program with Kalsec Inc. progressed past the feasibility stage and into the R&D and scale-up work stage. Development is ongoing.
• On August 21, 2023, Willow announced a new program with a leading NASDAQ listed, innovative biopharma company to develop new sustainable manufacturing routes to key intermediates and active pharmaceutical ingredients (APIs). The initial discovery phase was successful, and we anticipate a follow-on optimization phase to begin in Q4 2023.
• On September 2, 2023, Willow announced that it filed a patent application for its process to produce multiple corticosteroids, at an expected significantly reduced cost by utilizing its BioOxiTM platform for efficient bio-hydroxylation that can transform manufacturing. The market opportunity according to market research for these steroids is $5.9 billion by 2026.(1) Commercial discussions with multiple global API manufacturers are ongoing.
• On September 6, 2023, Willow announced that it had successfully completed the research and development program on cost-effective, sustainably produced ursodeoxycholic acid (UDCA). In this program, Willow developed a proprietary enzyme vital to the development of UDCA while solving for selective C-H hydroxylation at industrial scale. This breakthrough was made possible by Willow's BioOxiTM technology. Commercialization discussions are ongoing.
• On October 3, 2023, Willow continued to build on its business development gains with an announcement to collaborate with Suanfarma on the development of a large volume anti-infective API through precision fermentation on October 3, 2023.
• On October 24, 2023, Aurora Cannabis Inc. and Willow announced a confidential settlement resolving the ongoing patent ligation in Canada. Any costs associated with this lawsuit were fully accrued in prior quarters.

Third quarter financial highlights

• Willow ended the quarter with approximately $4.0 million in cash as of September 30, 2023, plus receivables of over $0.6 million.
• The Company reported revenue of $0.7 million for the quarter, and year-to-date total revenue of $1.1 million, a record for both the quarter and the year.
• Willow continued to transition to a more efficient company with a total cash burn from operating activities, excluding changes in working capital, and transition costs (severance, moving and related expenditures) to below $1.5 million for the third quarter of 2023. Reducing ongoing cash burn to below $0.5 million per month was an achieved target objective for the Company.
• On September 12, 2023, Willow announced an insider led convertible debenture financing, which was closed on October 10, 2023 for gross proceeds of $0.8 million.

Willow's unaudited condensed interim consolidated financial statements and related management's discussion and analysis for the quarter ended September 30, 2023, are available on SEDAR+ at www.sedarplus.ca.

Business outlook for 2023

The Company continues to successfully execute on its targeted technical, commercial, and financial goals for 2023. Willow's newly developed BioOxiTM platform that delivers transformational hydroxylation chemistry at scale has delivered both technical and commercial success beyond previous expectations, as evidenced with the record revenue in the third quarter and the third-party interest in Willow's development pipeline.

With current partnered programs rapidly moving into the next phases of development, including UDCA, which is moving to commercial scale, and five new partnered programs currently under negotiation, management expects continued strong R&D revenue growth in Q4 and first commercial revenues now as early as the first quarter of 2024. Further, the market interest in Willow's transformative corticosteroid process, which is expected to lower current manufacturing costs of multiple corticosteroids by up to 75%, has led to negotiations with multiple interested global API producers. Willow anticipates executing a partnership in the first half of 2024 that will consist of multi-million dollar upfront, R&D, and milestone payments along with future commercial revenues in the form of license agreements, royalties and/or profit-sharing agreements.

Based on the technical and commercial success of the existing and new programs, the Company anticipates that revenue will continue to accelerate during the remainder of the year and into 2024, which when combined with the Company's reduced cash burn provides a projected runway through 2024 and puts Willow on track to be cash flow positive as early as 2025.

About Willow Biosciences Inc.

Willow develops and produces precision fermented functional ingredients for the health and wellness, food and beverage and personal care markets. Willow's FutureGrown™ and BioOxi™ platforms enable large-scale production with sustainability at its core. Willow's R&D team has a proven track record of developing and commercializing bio-based manufacturing processes and products to benefit our B2B partners and their customers. For more information, visit www.willowbio.com.

FutureGrown™ and BioOxi™ are registered trademarks of Willow Biosciences Inc.

Note:

(1) https://www.researchandmarkets.com/reports/5734974

Forward-Looking Statements

This news release may include forward-looking statements including opinions, assumptions, estimates and the Company's assessment of future plans, operations and expansion, and, more particularly, statements concerning: business outlook for the remainder of 2023 and 2024, including revenue growth and reduced cash burn; becoming cash flow positive as early as 2025; development programs with existing partners and pipeline of potential partners, including the ability to accommodate new programs and to expand capabilities; execution of a significant deal in early 2024 that will consist of multi-million dollar upfront, R&D, and milestone payments along with future commercial revenues in the form of license agreements, royalties and/or profit-sharing agreements; the demand and market size potential of the synthetic ingredients industry; and the business plan of the Company, generally, including becoming a leader in precision fermentation, research and production of functional ingredients. When used in this news release, the words "will," "anticipate," "believe," "estimate," "expect," "intent," "may," "project," "should," and similar expressions are intended to be among the statements that identify forward-looking statements. The forward-looking statements are founded on the basis of expectations and assumptions made by the Company which include, but are not limited to: the success of Willow's strategic partnerships, including the development of future strategic partnerships; the financial strength of the Company; the ability of the Company to fund its business plan using cash on hand and existing resources; the market for Willow's products; the ability of the Company to obtain and retain applicable licences; the ability of the Company to obtain suitable manufacturing partners and other strategic relationships; and the successful implementation of Willow's commercialization and production strategy, generally. Forward-looking statements are subject to a wide range of risks and uncertainties, and although the Company believes that the expectations represented by such forward-looking statements are reasonable, there can be no assurance that such expectations will be realized. Any number of important factors could cause actual results biotechnology industry in general; the success of the Company's research and development strategies; infringement on intellectual property; failure to benefit from partnerships or successfully integrate acquisitions; actions and initiatives of federal, state and provincial governments and changes to government policies and the execution and impact of these actions, initiatives and policies; competition from other industry participants; adverse U.S., Canadian and global economic conditions; adverse global events and public-health crises; failure to comply with certain regulations; departure of key management personnel or inability to attract and retain talent; and other factors more fully described from time to time in the reports and filings made by the Company with securities regulatory authorities. Please refer to the Company's most recent annual information form and management's discussion and analysis for additional risk factors relating to Willow, which can be accessed either on Willow's website at www.willowbio.com or under the Company's profile on www.sedarplus.ca.

Any financial outlook and future-oriented financial information contained in this document regarding prospective financial performance, financial position, cash balances or revenue is based on assumptions about future events, including economic conditions and proposed courses of action based on management's assessment of the relevant information that is currently available. Projected operational information contains forward-looking information and is based on a number of material assumptions and factors, as are set out above. These projections may also be considered to contain future-oriented financial information or a financial outlook. The actual results of the Company's operations for any period will likely vary from the amounts set forth in these projections and such variations may be material. Actual results will vary from projected results. Readers are cautioned that any such financial outlook and future-oriented financial information contained herein should not be used for purposes other than those for which it is disclosed herein.

The forward-looking statements contained in this news release are made as of the date hereof and the Company does not undertake any obligation to update publicly or to revise any of the included forward-looking statements, except as required by applicable law. The forward-looking statements contained herein are expressly qualified by this cautionary statement.

Certain information contained herein has been obtained from published sources prepared by independent industry analysts and third-party sources (including industry publications, surveys and forecasts), including certain reports published by Research and Markets. While such information is believed to be reliable for the purposes used herein, Willow do not assume any responsibility for the accuracy of such information. Some of the sources cited in this news release have not consented to the inclusion of any data from their reports, nor has Willow sought their consent.

SELECTED FINANCIAL DATA
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SOURCE Willow Biosciences Inc.