Lexaria Bioscience Corp. LXX:CSE | LXRP:US Drug Delivery Platform Innovator Investor Presentation February 2019 LexariaBioscience.com 1
Disclaimer This presentation includes forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Statements which are not historical facts are forward-looking statements. The Company makes forward-looking public statements concerning its expected future financial position, results of operations, cash flows, financing plans, business strategy, products and services, evaluation of medical marijuana projects, alternative health projects or products, and cannabidiol-fortified products or services for participation and/or financing, competitive positions, growth opportunities, plans and objectives of management for future operations, including statements that include words such as "anticipate," "if," "believe," "plan," "estimate," "expect," "intend," "may," "could," "should," "will," and other similar expressions that are forward-looking statements. Such forward-looking statements are estimates reflecting the Company's best judgment based upon current information and involve a number of risks and uncertainties, and there can be no assurance that other factors will not affect the accuracy of such forward-looking statements including, without limitation, foreign exchange and other financial markets; changes of the interest rates on borrowings; whether or not the Company will be successful in executing its business plan in whole or in part; hedging activities; changes in commodity prices; changes in the marketing or capital project expenditure levels; litigation; legislation; environmental, judicial, regulatory, political and competitive developments in areas in which Lexaria Corp. operates. These and other risks and uncertainties are more fully described in our periodic reports and other disclosure documents filed by Lexaria Corp. from time to time with regulatory authorities available on SEDAR at www.sedar.com and on EDGAR at www.sec.gov, and the reader is encouraged to review these documents. Planned dates stated herein are estimates only, based on best information available. Dates are not assured and are subject to revision without notice. The Company assumes no obligation, except as required by law, to update any forward-looking statement, whether as a result of new information, future events or otherwise. This presentation is not an offer to sell or a solicitation of an offer to buy securities of Lexaria Bioscience Corp. It is a short summary of certain information for introductory purposes only and is not to be relied upon for investment purposes. No statement within has been evaluated by the Food and Drug Administration, and no product or service is intended to diagnose, treat, cure or prevent any disease. Investor Presentation 2 2
Drug Delivery Platform Innovator DehydraTECH TM - Patented technology, Changing the way Active Pharmaceutical Ingredients (“APIs”) enter the body orally Masks Improves speed Increases Simple and cost unwanted taste of onset bioavailability effective Eliminates the Effects are felt Equates that of Easy to Eliminates the need for sugar- need for sugar- within 10-20 min less healthy implement filled edibles. filled edibles. (vs. 60-120 min). administration methods like inhalation Investor Presentation 3
DehydraTECH ™ Patent Portfolio Method of use & Composition of matter claims • Cannabinoids (CBD, THC) 10 50+ • Nicotine (and its analogs) • NSAIDs Patent Applications Patents Granted • Fat soluble vitamins 6 USA 10 Multiple dosage forms - foods, liquid emulsions, tablets, capsules 4 Australia Patent Families Investor Presentation 4
Commercial Applications Cannabis NSAIDs Nicotine Vitamins • Ingestible product • Existing and new • Alternate means to • World’s first ingestible formats of all types, ingestible product formulate NSAIDs, nicotine products, • Enhanced palatability, • Higher bioavailability, • Alternative to formats, • Enhanced absorption • Lower input speed of effectiveness smoking/vaping, gums and potency, performance for requirements, and patches, • Viable and healthier • Less burden on liver • High bioavailability synthetics as well as alternative to natural fat soluble and kidneys (lower without first pass liver smoking/vaping. vitamins (A, D, K & E). toxicity). metabolism. Estimated Global Market Sizes $990B $60B $31B $13B Sources: ArcView Research & EuroMonitor Investor Presentation 5 5
Cannabis | Cannabinoids | THC | CBD Oral Delivery Investor Presentation 6 6
Cannabinoids: Entering the Blood Stream 3 prominent ways cannabinoids enter the blood stream: Inhalation High bioavailability (est. 30%) DehydraTECH TM Harmful to Lungs transforms the way Sub-lingual (under tongue) cannabinoids enter the bloodstream through the Medium bioavailability (est. 16%) Foul taste Gastrointestinal Tract Fast Acting Oral – Gastrointestinal Tract Improved Taste Low bioavailability (est. 3-5%) Increased Bioavailability Sugar filled, to mask taste Investor Presentation 7 7
Consumer Shift Away From Flower 4406 4124 4310 4391 4455 Colorado Oregon California 3734 Canada: Cannabis sold Non-flower 34 38 41 46 46 to clients 56 56 57 60 Market during 2018 share % (kg) 66 62 59 54 54 44 44 43 40 Flower 2014 2015 2016 2017 Q1 2018 Q1 '17 Q1 '18 Jan '18 April '18 Apr May Jun Jul Aug Sept Cannabis Oil 3734 4406 4124 4310 4391 4455 Dried Cannabis 2354 2310 2103 2151 2069 1755 Market share for flower $372M Source: canada.ca $150M is eroding – even In Canada’s tightly regulated though the market is $7.12/g market (with limited product $4.94/g growing and prices are formats), consumers are dropping. moving away from smoking. Q1 2014 (Colorado) Q1 2018 Source: colorado.gov bdsanalytics.com Investor Presentation 8
Cannabis Consumption Trends DehydraTECH™ Improves alternate delivery methods Trend away from smoking DehydraTECH™ DehydraTECH™ spans foods, Improves beverages, Trend to limit Trend toward cannabinoid nutritional dosage in absorption supplements and beverages & edibles more edibles Investor Presentation 9
Cannabinoid Absorption - Clinically Proven Plasma Concentration Comparison European human 60 clinical study TurboCBD ™ Plasma concentration (ng/mL) DehydraTECH TM 50 Double-blind 40 90 mg dose Control 30 317% more CBD 20 delivered ≤ 30 min. 10 Higher CBD delivery 0 throughout entire study 0 100 200 300 400 Time (min) Investor Presentation 10
Business Model: Royalties & Sales Innovation & Research New product development Patent applications Clinical trials Out-license to third- Demonstration products party partners TurboCBD™ capsules High margin royalty model, ViPova ™ teas Sample DehydraTECH Distribution partnerships licensees: www.1906newhighs.com www.hillstreetbeverages.com Investor Presentation 11
Lexaria Nicotine Oral Nicotine Delivery Forms LexariaNicotineCo.com Investor Presentation 12 12
Nicotine: a smoke-free future? British American FDA 1.1 billion Tobacco Phillip to rapidly expand Comprehensive regulatory Morris smokers globally “next - gen products” plan to shift trajectory of tobacco-related disease, 7 million pledges $1B to “Ultimately, we want to death anti-smoking be in a position to stop deaths/year globally lowering selling cigarettes No 1 billion entirely .” nicotine in -- André Calantzopoulos, Nicotine cigarettes to deaths expected this century Phillip Morris CEO, May 30, 2018. non- edibles addictive Smoking is the levels due to nicotine’s world's leading inability to securely cause of pass through the GI preventable tract without irritation. death World Health Organization (www.who.int) Foundation for a Smoke-Free World, Inc. (www.smokefreeworld.org) Investor Presentation 13
Altria Group Inc. Funding Partner, DehydraTECH Licensee Definitive Agreement signed January 15, 2019 Leading Patented Lexaria Nicotine Altria Group nicotine oral-based Leader in unique alternate Leader in authorized, gastro-intestinal delivery industry delivery non-combustible, methods for orally- participant technique reduced- risk products. administered products. Lexaria Nicotine Altria Group Product • • Majority-owned subsidiary of DehydraTECH licensee for oral & development non-combustible nicotine formats, Lexaria Bioscience, for orally- • • Ownership investment in Lexaria Holds DehydraTECH license administered rights for nicotine related use. Nicotine to fund further research. nicotine formats Investor Presentation 14
Completing the puzzle for Oral Nicotine Forms Market need FDA – comprehensive plan to reduce smoking Altria Group - Strategic Funding Partner Initial Funding: US$1 million Milestone based: up to US$12 million DehydraTECH TM • Altria Group has licensed DehydraTECH to commercialize oral, non-combustible nicotine products, Collaborative Research • Exclusive license in the United States, • Non-exclusive globally, Altria Group & Lexaria Nicotine • Royalty-based payment structure. to conduct animal & human studies Investor Presentation 15
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