INNOCAN PHARMA CORPORATION INNOCAN PHARMA CORPORATION
Management's Discussion and Analysis
For the three and six months period ended June 30, 2022
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Innocan Pharma Corporation
Management's Discussion and Analysis
For the three and six months period ended June 30, 2022
1. MANAGEMENT'S DISCUSSION AND ANALYSIS
The following discussion and analysis is management's assessment of the results and financial condition of Innocan Pharma Corporation (the "Company").
The following information should be read in conjunction with the notes to the Company's unaudited condensed consolidated financial statements for the period ended June 30, 2022, and the Company's audited consolidated financial statements and accompanying notes for the year ended December 31, 2021.
The date of this management's discussion and analysis ("MD&A") is August 29, 2022. The Company's comparative amounts in this MD&A have been prepared in accordance with International Financial Reporting Standards ("IFRS"). All dollar amounts are stated in United States dollars ("USD") unless otherwise indicated (for reference, "CAD" means Canadian dollars).
Statements in this report that are not historical facts are forward-looking statements involving known and unknown risks and uncertainties, which could cause actual results to vary considerably from these statements. Readers are cautioned not to put undue reliance on forward-looking statements.
CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING INFORMATION
This MD&A contains forward-looking information within the meaning of applicable Canadian securities legislation ("forward-lookinginformation"). Such forward-looking information involves known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of the Company to be materially different from any future results, performance or achievements expressed or implied by the forward-looking information. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date the statements were made.
In some cases, these forward-looking statements can be identified by words or phrases such as "may", "believes", "expects", "will", "intends", "projects", "anticipates", "estimates", "continues", "plans", "aim", "seek" or the negative of these terms, or other similar expressions intended to identify forward-looking statements. The Company has based these forward-looking statements on current expectations and projections about future events and financial trends that they believe may affect the Company's financial condition, results of operations, business strategy and financial needs.
Forward-looking information contained herein is given as of the date of this MD&A and the Company disclaims any obligation to update any forward-looking information, whether as a result of new information, future events or results, except as may be required by applicable securities laws. There can be no assurance that forward-looking information will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Accordingly, readers should not place undue reliance on forward-looking information. For a description of material factors that could cause the Company's actual results to differ materially from the forward-looking statements in this MD&A, please see the section titled "Risks and Uncertainties" herein.
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Innocan Pharma Corporation
Management's Discussion and Analysis
For the three and six months period ended June 30, 2022
2. DESCRIPTION OF BUSINESSCompany Overview
Innocan Pharma Corporation was incorporated under the Canada Business Corporations Act on May 31, 2018. The Company's registered office is 1015, 926 - 5 Avenue SW Calgary, Canada and its corporate website is www.innocanpharma.com. The Company is publicly listed on the Canadian Securities Exchange trading under the symbol INNO, and is quoted in the United States on the OTCQB venture market under the symbol INNPF, and is listed for trading in Germany on the Frankfurt stock exchange under the symbol IP4. The Company is the parent company of Innocan Pharma Ltd. ("Innocan").
Innocan is a pharmaceutical technology company that focuses on the development of several drug delivery platforms, combining cannabinoids, especially cannabidiol ("CBD"), with other pharmaceutical ingredients as well as the development and sale of CBD-integrated pharmaceuticals and topical products. Innocan is at a pre-clinical stage and is expected to conduct activities mainly in the United States (US), Canadian and European markets. Innocan's operations and research and development activities are based in Israel.
In October 2019, Innocan announced its plans to enter the CBD beauty market and to manufacture CBD cosmetic products. Innocan intends to sell its CBD cosmetic products primarily in the US, Canadian and European markets. For more information on Innocan's product lines, please see details on SHIR | Beauty & Science (shirbeauty.com) and its corporate website at www.innocanpharma.com.
On May 26, 2021, Innocan entered into a founder's agreement with Brandzon Co. Ltd. ("Brandzon"), to establish a joint venture by the name of B.I. Sky Global Ltd. ("Sky Global") that focuses on the development of beauty microbrands for online platforms such as Amazon, and other e-commerce and online marketplaces.
In bringing together a unique combination of experts in online marketplaces, e-commerce, logistics, operations and finance, Sky Global is focusing on advancing online sales for microbrands.
References throughout to "Innocan" and the "Company" refer generally to the collective activity and operations of both entities, in aggregate.
Description of the Company's Principal Businesses and Operations Company's Activity Under Research Agreements
On January 12, 2022, the Company announced a second amendment (the "Second Amendment") to the research and license agreement with Yissum Research Development Company of the Hebrew University of Jerusalem Ltd. ("Yissum") in connection with the evaluation of the efficacy of the Company's CBD-loaded liposome platform technology ("LPT") in treating dogs. Pursuant to the Second Amendment, Yissum will conduct additional research related to liposomal CBD on dogs (the "Additional Research") for an additional research fee of $100,000. The Additional Research will be performed by Professor Merav Shamir of the veterinary neurology and neurosurgery department at the Koret School of Veterinary Medicine Hospital, Hebrew University of Jerusalem for a period of six months, in accordance with a new research program and budget which will
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Innocan Pharma Corporation
Management's Discussion and Analysis
For the three and six months period ended June 30, 2022
supplement the previous research program pursuant to the original research and license agreement. The Company expects to initiate licensing discussions regarding the veterinarian application of this form of CBD therapy within the next 12 months, and to proceed to the safety testing stages throughout 2023, subject to the terms of the license agreement. The Company estimates the costs of the current stage for the next 12 months to be approximately $1,200,000. Any approvals will be determined based on the future business arrangements regarding licensing.
On January 17, 2022, the Company announced that it inaugurated its first drug research and development lab at Biohouse Labs at Hadassah Medical Center in Jerusalem to accelerate the Company's LPT development. The Company's development program is focused on improving and optimizing LPT characterization methods and upscaling capabilities. A staff of six individuals (scientists and scientific assistants) are working on the accelerated development of the LPT technology.
On March 8, 2022, the Company reported a positive result from the use of its CBD LPT on a dog suffering from osteoarthritis of the hip and elbow joint (causing inability of the dog to walk and stand up, as well as intense pain and a low activity rate). CBD LPT injection was provided as a treatment and led to a decrease in pain and improved activity and vitality, as reported by the dog's owner. The CBD was administered to the dog and the Company's LPT remained in the dog's plasma for 28 days.
On March 28, 2022, the Company reported the successful completion of its CBD liposome physico- chemical characterization.
On April 29, 2022, the Company announced the publication of a case report in Frontiers in Veterinary Science regarding its compassionate care liposomal-CBD formulation (Innocan's LPT platform). The formulation was administered to a 14-year-old dog suffering from severe cervical pain, hip and elbow osteoarthritis and testicular neoplasia. It was reported that the administration resulted in decreased pain and improved mobility.
On June 10, 2022, the Company announced successful preliminary results of a small-scale efficacy trial in dogs with refractory (drug-resistant) epilepsy. In this initial phase, the dogs were treated with Innocan's LPT injection, and results demonstrated that the dogs experienced a decreased frequency of epileptic seizures.
On June 24, 2022, the Company announced successful preclinical trials in dogs with osteoarthritis. The trials reported decreased pain in dogs suffering from severe osteoarthritis in most joints, and severe muscle atrophy surrounding the pelvic limbs. Innocan's liposomal CBD was administered in addition to joint supplements, non-steroidalanti-inflammatory drugs, and hydrotherapy.
The table below provides a description of each of Innocan's major projects. More stages are required in order to receive full regulatory approval. Forward-looking information is based on estimations at the time of this report. Actual results may vary.
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Innocan Pharma Corporation
Management's Discussion and Analysis
For the three and six months period ended June 30, 2022
Expenditures | Estimated Costs to | Expected Time | ||||||||
Milestones | Milestone status | Incurred to Date | Achieve Milestone | |||||||
Period | ||||||||||
(US$) | (US$) | |||||||||
Project: CBD-loaded exosomes (the "CLX Project") | ||||||||||
Literature research | Concluded | |||||||||
Exosome production | Undergoing production | 50,000 | 90,000 | On-going | ||||||
Exosome | Undergoing production | Part of the payment to | See Ramot Research | Complete | ||||||
characterization | Ramot. See Ramot | Agreement costs below. | ||||||||
Research Agreement | ||||||||||
costs below. | ||||||||||
CBD synthesis for | Work undergoing | 150,000 | 50,000 | Q3 22 | ||||||
Exosome loading | ||||||||||
Loading the CBD in | Work undergoing | Part of the payment to | See Ramot Research | Q3-4 22 | ||||||
the Exosome | Ramot. See Ramot | Agreement costs below. | ||||||||
Research Agreement | ||||||||||
costs below. | ||||||||||
In - Vitro | Work undergoing | Part of the payment to | See Ramot Research | Q3-4 22 | ||||||
Ramot. See Ramot | Agreement costs below. | |||||||||
Research Agreement | ||||||||||
costs below. | ||||||||||
Production of the | In preparation | Part of the payment to | See Ramot Research | Q2 23 | ||||||
CLX | Ramot. See Ramot | Agreement costs below. | ||||||||
Research Agreement | ||||||||||
costs below. | ||||||||||
In-Vivo (animal | In preparation | Part of the payment to | See Ramot Research | Q1-2 23 | ||||||
study) | Ramot. See Ramot | Agreement costs below. | ||||||||
Research Agreement | ||||||||||
costs below. | ||||||||||
Safety in animals | Waiting for animal model | - | 600,000 | Q4 23 - Q4 24 | ||||||
(including | results | |||||||||
Pharmacokinetic, | ||||||||||
toxicity, bio- | ||||||||||
distribution) | ||||||||||
Ramot Research | 1,060,000 | 1,040,000 | ||||||||
Agreement | ||||||||||
Total pre-clinical | 1,260,000 | 1,780,000 | ||||||||
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Innocan Pharma Ltd. published this content on 31 August 2022 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 31 August 2022 10:50:01 UTC.
