Dr. Steven Theriault reports

CYTOPHAGE ANNOUNCES FISCAL YEAR END 2023 RESULTS

Cytophage Technologies Ltd. has released its fiscal year-end results for the year ending Dec. 31, 2023. Cytophage's audited financial statements and the management discussion and analysis report are available under the company's profile on SEDAR+.

"Two thousand twenty-three was an extremely busy year for Cytophage in terms of commercializing our key animal health products while also initiating all the necessary steps to take the company public. Our growing operations have set us up for success in 2024," said Dr. Steven Theriault, chief executive officer of Cytophage.

The company's start to 2024 has already seen major accomplishments:

• Cytophage is the first phage company to go public in Canada.
• Cytophage is the first phage company to provide phage therapy in Canada for a prosthetic joint infection.
• Construction started on its new 20,000-square-foot facility that will include a state-of-the-art laboratory, GMP-certified (good manufacturing practice) manufacturing suite, administrative offices and warehouse space. It is expected to open in June, 2024.

The company's main focus is on commercializing market-ready phage products for animal health, particularly to address salmonella and E. coli in the poultry market. Cytophage continues to work with Renata Ltd. in Bangladesh to provide a bacteriophage solution that was developed specially to be effective and sustainable for poultry producers in the region, where environmental conditions (heat/humidity) can make disease control difficult. Cytophage's innovative manufacturing breakthrough of lyophilizing phages provides a competitive advantage over other phage producers that offer only liquid products. The company has been able to increase its product's heat tolerance and shelf life and make it even easier for producers to use while keeping manufacturing costs comparable with liquid production. Cytophage expects this breakthrough to allow for further innovation in developing new bacteriophage products.

Cytophage will expand its commercialization efforts in South Asia in 2024 where demographic and business conditions are quite favourable. Market research in this region has shown that vertically and horizontally integrated poultry operations are primed to evaluate and incorporate phage products into their feed, hatching and broiler production processes. Cytophage's customized, regional approach to phage development resonates with its goal to reduce the use of broad-spectrum antibiotics and replace them with more targeted phages. Business development for the first quarter focused on marketing regionalized phage solutions directly to some of the largest, vertically and horizontally integrated poultry operations in the world that are in jurisdictions where phages are more readily accepted from both a business and a regulatory standpoint. Pursuing these companies will be key to 2024 business development efforts.

While commercializing animal phage products is the company's priority, Cytophage also developed its first human phage therapy for a compassionate use case. "We are proud of the recent landmark trial at The Ottawa Hospital and the use of our phages to treat an antibiotic-resistant bacterial infection affecting a prosthetic joint replacement patient," commented Dr. Theriault. Building on the success of this first treatment, Cytophage is currently exploring a limited number of other opportunities to provide life-changing therapies for people suffering from severe prosthetic joint infections.

Greater attention is being paid to the phage sector, with an increased number of compassionate use cases being highlighted in the media. In Canada, CBC and CTV did national news segments on Cytophage's prosthetic joint infection phage therapy case. In the United States, CNN aired a show hosted by Dr. Sanjay Gupta that highlighted the promise of phages. Recent activities (financings and merger and acquisition deals) involving human health phage companies, such as Armata Pharmaceuticals, BiomX and Adaptive Phage Therapy, brought international attention to the sector. These important transactions demonstrate the growing attractiveness and acceptance of the use of phages to address health challenges. As Dr. Theriault stated, "I strongly believe that Cytophage is uniquely positioned to play a leading role in commercializing the scientific advancements of our phage products and combating the global problem of antibiotic resistance."

2023 milestones

Animal health division:

• Cytophage entered into a distribution agreement with Renata -- animal health division in Dhaka, Bangladesh, for the distribution of Cytophage's animal health products by Renata in Bangladesh, Myanmar, Nepal and Sri Lanka.
• Cytophage submitted its first ever GRAS (generally recognized as safe) notice to the Office of Food Additive Safety of the Food and Drug Administration, which such notice concluded, through scientific procedures, that the phage cocktail targeted for use on chicken meat is generally regarded as safe and is not subject to premarket approval requirements for use in food.
• The company then proceeded to submit its first ever LONO (letter of no objection) to the Health Products and Food Branch of Health Canada to review the use of its phage product targeted for use on chicken meat as an anti-microbial food processing aid to reduce salmonella on the surface of raw, skinless and boneless poultry meat.
• Cytophage completed a number of studies related to its poultry phage product for addressing salmonella and E. coli infections in chickens. The studies showed that the product not only reduced the lethality and decreased the transmission of the bacteria in broiler chicken and layer hens, it resulted in healthier and heavier birds that were ready for market sooner than untreated birds. These studies include:
  • Evaluating the poultry phage product's ability to reduce salmonella transmission. The study showed that, in broiler chickens, the phage product removes the lethal effect of salmonella and E. coli and decreases transmission of bacterial infections within the flock. The result was healthier chickens and increased weight gain.
  • Evaluating the ability of the phage product to protect layer hens from salmonella and E. coli. The study results showed that the phage product removed the lethal effect of salmonella and E. coli. As well, it decreased colonization in birds if an infection was present and decreased transmission of bacterial infection within the flock.
  • Evaluating the ability of the phage product to protect broiler chickens from salmonella and E. coli in Bangladesh. The study found that the treated birds were healthier and heavier than untreated birds. Further, mortality was decreased by more than 20 per cent.
• Evaluating the Clostridium perfringens phage product in poultry. Cytophage developed an animal model for lethality which then allowed for testing of its phage product against necrotic enteritis disease in broilers. The study showed that necrotic enteritis disease severity is reduced in broiler chickens infected with Clostridium perfringens when using the phage product.
• Evaluating the ability of the phage product to reduce salmonella on experimentally contaminated chicken meat. The study results showed that the phage product significantly reduced the viable salmonella population when applied to contaminated skinless, boneless chicken meat.

Human health division:

• In late 2023, Cytophage was contacted by physician, infectious diseases clinician-scientist Dr. Marisa Azad (principal investigator), who had a patient suffering from an antibiotic-resistant infection associated with a prosthetic joint replacement. A treatment plan was developed and approved by The Ottawa Hospital Research Institute and Health Canada through the open-label individual patient trial (N of one) in 2024.

Corporate developments:

• During Q2 of 2023, the company began laying the groundwork for a planned initial public offering in early 2024.
• In May, Cytophage entered into a letter of intent with Cuspis Capital III Ltd. to complete a business combination and concurrent financing. In May, Cytophage secured a 20,000-square-foot facility that will be renovated to be its worldwide headquarters and is expected to open in June, 2024.
• In November, Cytophage, Cuspis Capital III and 10179321 Manitoba Ltd., a wholly owned subsidiary of the Cuspis Capital III, entered into a business combination agreement.
• In December, the company finalized the financing for gross proceeds of $2.5-million which was in addition to the $522,000 financing closed in the summer of 2023.

About Cytophage Technologies Ltd.

Cytophage Technologies is a pioneering biotechnology company dedicated to bacteriophage research, product development and commercialization. Committed to addressing the global challenge of antibiotic resistance, Cytophage advances innovative products that harness the power of bacteriophages to combat bacterial infections affecting human health, animal health and food security.

We seek Safe Harbor.