Lexaria Bioscience Corp. LXX:CSE | LXRP:US Drug Delivery Platform Innovator Investor Presentation July 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. 2 2
About Our Businesses EXISTING BUSINESS VERTICALS PENDING BUSINESS VERTICALS • World’s first ingestible nicotine products • An alternative to traditional smoking/vaping, gum • Next-gen formulations for PDE5 inhibitors, and patch nicotine based products NSAIDs, Vitamins, Hormones, and more • Higher bioavailability / lower dosage • High bioavailability without first pass liver • Less burden on liver and kidneys (lower mechanism toxicity) • Market size: $990B • Combined market size: + $91B Over $1 Trillion • Foods, beverages, candies, supplements: ALL oral Combined Market Size • Better Flavor, Speed, and Potency Cannabis/Hemp • Healthier alternative to smoking/vaping • Federally legal US national hemp retail market Pharma • Combined market size: $14B Nicotine Lexaria’s initial focuses are the $990B ingestible Nicotine and $14B Cannabis markets 3 3
US Cannabis Market Over $1 Trillion Combined Market Size Cannabis/Hemp Pharma Nicotine 4 4
Achievements & Catalysts Cannabis Nicotine (Non-Smoking Alternative) • • Creating the world’s best ingestible/oral nicotine Commercializing oral cannabinoid delivery that is up to 811% more effective than ingesting generic cannabinoids product • Cannabis/Hemp is a growing market with proven consumer • Multi-decade s hift away from combustible smoking. shifts from flower to non-flower products → current market Regulations favorable to nicotine alternatives → size is $14B current market size is $990B • Signed 8 commercial licensing agreements with growing • Entered multi-year agreement with Altria Group, brands, such as Hill Street Beverages and 1906 including commercial licensing agreement o Licenses represent an upfront fee and recurring o Altria is fully responsible for R&D; product revenue development; regulatory approval and product • Catalysts introduction o Existing licensee 1906 in multi-state expansion • Licensed technology to Altria for USA for o Only 1 existing license currently generating revenue: 7 others poised to begin operations 2019-20 undisclosed royalty; license rights remain available in rest of world o Upcoming Canadian legal edibles market • o Recent federal US legal CBD/Hemp market Catalysts o Onboarding of new clients o Additional lab test results o Proof of product concept o Product introduction and royalty streams 5 5
Patented Technology Benefits Increases Masks unwanted Improves Increases Simple and brain taste speed of onset bioavailability cost effective absorption Equates that of Animal testing Easy to implement Eliminates the Effects are felt within less healthy confirms up to need for sugar- 10-20 min (vs. 60-120 administration 19x improvement filled edibles. min). methods like inhalation DehydraTECH ™ - Patented technology changing how Active Pharmaceutical Ingredients (APIs) enter the body orally 6 6
DehydraTECH ™ Patent Portfolio Method of use & Composition of matter claims • Cannabinoids (CBD, THC) 11 ~60 • Nicotine (and its analogs) • NSAIDs Patent Applications Patents Granted • Fat soluble vitamins 6 USA 10 Multiple dosage forms - foods, liquid emulsions, tablets, capsules 5 Australia Patent Families 7
Cannabinoids | THC | CBD Oral Delivery 8 8
Non-Flower Consumption Continues To Gain Market Share US FLOWER VS. NON-FLOWER CONSUMPTION CANADA: CANNABIS SOLD TO CLIENTS IN 2018 (kgs) 4406 4124 4310 4391 4455 3734 Colorado Oregon California Non- 34 38 41 46 46 flower 56 56 57 60 Market 66 share % 62 59 54 54 44 44 43 40 Apr May Jun Jul Aug Sept Flower Cannabis Oil 3734 4406 4124 4310 4391 4455 2014 2015 2016 2017 Q1 Q1 '17 Q1 '18 Jan '18 April '18 Dried Cannabis 2354 2310 2103 2151 2069 1755 2018 KEY INSIGHTS AND LEXARIA’S SOLUTION Key Insights Lexaria’s Solution 1. Trend away from cannabis smoking 1. DehydraTECH ™ improves alternate delivery methods 2. Trend to limit dosage in edibles 2. DehydraTECH ™ improves cannabinoid absorption 3. Trend towards beverages and edibles 3. DehydraTECH ™ spans foods, beverages, nutritional supplements and more Sources: colorado.gov, bdsanalytics.com and canada.ca 9 9
Lexaria’s DehydraTECH TM Technology is Faster and More Effective Methods of Cannabinoid Consumption CASE STUDY: TurboCBD ™ - Lexaria’s Oral CBD Product 1. Inhalation • High bioavailability (~32%), harmful to Lungs • 90mg DehydraTECH dose vs. Competitor 100mg dose • 2. Sub-lingual (under tongue) Competitor delivers virtually zero CBD at 30 minutes • • Medium bioavailability (~16%), foul taste Lexaria quicker “on” and quicker “off” 3. Oral – Gastrointestinal Tract Faster onset • Low bioavailability (~3-5%), sugar filled to D 90mg PTL101 - 100mg and offset; mask taste 60 higher peak Plasma concentration (ng/mL) concentration 50 40 DehydraTECH TM (Oral Technology) 30 Transforms the way cannabinoids enter the 20 bloodstream through the gastrointestinal tract 10 • Fast Acting 0 0 30 60 90 120 150 180 210 240 300 360 420 480 • Improved Taste Time (min) • Increased Bioavailability • Improved Brain Barrier Penetration 10 10
Case Study: TurboCBD ™ - Clinically Proven Blood/Body Response Benefits • 2018 European human 80 Turbo 90mg clinical study (n=12) 90mg ** 70 placebo ** • Double-blind, 90 mg CBD dose Venous plasma concentration (ng/mL) 60 • 317% more CBD delivered 50 ≤ 30 min ( 95% CI, p=0.051) . 40 • Higher CBD delivery Ψ throughout entire study Ψ 30 • Lower blood pressure 20 317% more shown vs. placebo 10 CBD delivered (95% CI, p=0.027) ≤ 30 min . 0 • Higher cerebral perfusion 0 30 60 90 120 150 180 210 240 270 300 330 360 Time (min) shown vs. placebo and positive Plasma cannabidiol (CBD) concentration in venous blood over 6 hours following consumption of generic 90mg (dashed black open circles) CBD doses compared control (95% CI, p=0.002 and 0.017) to DehydraTECH TM 90mg (solid grey solid circles) CBD doses. Standard error included for clarity. **p<0.01 TurboCBD TM 90mg > all others; Ψp <0.05 only TurboCBD 90mg > placebo. Note both generic and DehydraTECH TM are otherwise significantly greater when compared to placebo. . 11
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