Mr. Gilles Gagnon reports

CEAPRO PROVIDES BUSINESS UPDATE ON PROGRESS OF ONGOING DEVELOPMENT PROGRAMS, TECHNOLOGY AND COSMECEUTICAL BASE BUSINESS

Ceapro Inc. has provided an update on its progress across its current business. On Dec. 14, 2023, the company announced it entered into a definitive agreement to combine operations with Aeterna Zentaris Inc., a Toronto Stock Exchange- and Nasdaq-listed specialty biopharmaceutical company, in an all-stock merger of equals transaction to be effected by way of a plan of arrangement under the Canada Business Corporations Act. The arrangement is subject to various conditions, including the approval of the company's shareholders and optionholders (collectively, the securityholders) at the special meeting of securityholders scheduled for March 12, 2024. In addition to the proposed arrangement, the company continues to execute on progress across its continuing development projects, as detailed below.

"We continue to make promising progress across all areas of our business. Given the recent developments, we anticipate that all key success factors will align to expand our business model. Through the planned merger with Aeterna Zentaris, we aim to become a combined company with high potential for value creation in the biopharmaceutical industry. We look forward to an exciting future ahead for the company, and generating value in the short and long term for all stakeholders," stated Gilles Gagnon, MSc, MBA, president and chief executive officer.

Pipeline development

Ceapro's focus is on avenanthramides, beta glucan from oat and yeast, and new chemical complexes/delivery systems:

• Avenanthramides (Avs):
  • Phase 1/2a clinical trial being conducted at the Montreal Health Institute: Following the successful completion of bioassays for measurement of Avs in human tissues, the trial is maintaining rapid progress forward. Since Dec. 9, 2023, three cohorts of eight healthy subjects have already been completed with ascending doses from 30 milligrams (mg) to 60 mg and 120 mg. No significant adverse events have occurred with the first two doses and members of the data safety monitoring board will complete the full analysis of results from the 120 mg cohort during the first week of March, being able to declare whether the trial may be pursued as planned, and to give a green light for the next dosage of 240 mg. These results are very promising given that the higher the dose without safety concerns, the larger the potential for extending to various inflammation-based diseases.
• Oat beta glucan powder (OBG):
  • Samples of powder formulation have been successfully prepared and shipped to Symrise AG, Ceapro's long-term partner, for liquid reformulation and assessment for the Chinese market.
• Yeast beta glucan (YBG):
  • Specifications have been standardized and the product is ready to be used for the PGX (pressurized gas eXpanded) scale-up projects in Edmonton and Austria. Depending on the successful scale-up of PGX technology and approval from health authorities, this product could be offered as an immune booster before year-end 2024.
• Enriched oat flour with high concentration of Avenanthramides:
  • The first batch has been successfully produced. Samples have been sent to one major customer.
  • The company is assessing the potential of this product for preventive antimicrobial properties when used to produce oat-based nutritional products.

New product development:

• Chewable oat beta glucan:
  • Ceapro's team has successfully developed a unique, standardized formulation for a healthy confection which includes a high concentration of OBG, with daily dosage according to approved claims in 10 developed countries.
  • Health Canada has approved Ceapro's novel nutraceutical product (NPN 80127493). The substantive claims derived from this approval include reduction of LDL (low-density lipoprotein) cholesterol, supporting cardiovascular health reduction of Type 2 diabetes risks, source of fibre for the maintenance of general good health and support of a healthy digestive system.
  • Ceapro's team anticipates the official commercial launch of its approved natural health product in H2 2024, marking an important chapter in the company's journey toward promoting wellness while expanding its business model. According to Future Market Insights, the oat beta glucan market is expected to reach $846.1-million (U.S.) in 2032.
• Whey proteins:
  • Using its PGX technology, Ceapro and University of Alberta researchers successfully processed, in one economical step, a very complex mixture containing animal-based proteins and, in particular, whey proteins that are typically found in liquid that remains after cheese production. While these proteins are widely used in sport drinks, baked goods, meal replacements, protein supplements and infant formulas due to their recognized nutritional and functional properties, current commercial purification processes require many steps and considerable amounts of water. PGX technology can be a very efficient and economical alternative for this product offering.
  • Results from this groundbreaking study were published in the Journal of Food Engineering in an article titled "Single-step concentration of whey proteins using the pressurized gas eXpanded (PGX) liquid technology: Effect on physicochemical properties and scale-up." They have also been submitted for a presentation at the 20th European meeting on supercritical fluids in Maribor, Slovenia, May 26 to May 29, 2024.

Technology:

• Pressurized gas eXpanded technology:
  • Edmonton main facility PGX scale-up 50-litre vessel: The project remains on schedule. The mechanical part of the project is 100 per cent completed and control systems are 80 per cent completed. Pending receipt of remaining automation components, commissioning expected to be completed by end of Q1 2024.
  • Natex facility, Austria, PGX scale-up 100-litre vessel: The project remains on schedule. PGX pressure vessel design is 100 per cent completed. Initial safety and regulatory risk assessment has also been completed. Commissioning is expected to be completed by end of Q3 2024.

Cosmeceutical base business:

• From a business perspective, while 2023 was a challenging year due to a reorganization from one major customer in the United States, the company is pleased to announce that this customer has resumed ordering from Ceapro during Q1 2024, with a plus-20-metric-tonne order of avenanthramides.

About Ceapro Inc.

Ceapro is a Canadian biotechnology company involved in the development of proprietary extraction technology and the application of this technology to the production of extracts and active ingredients from oats and other renewable plant resources. Ceapro adds further value to its extracts by supporting their use in cosmeceutical, nutraceutical and therapeutics products for humans and animals. The company has a broad range of expertise in natural product chemistry, microbiology, biochemistry, immunology and process engineering. These skills merge in the fields of active ingredients, biopharmaceuticals and drug-delivery solutions.

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