Mr. Chris Bunka reports

LEXARIA BIOSCIENCE ADVANCES 2021 STRATEGIC INITIATIVES

Lexaria Bioscience Corp. has outlined its planned strategic initiatives for 2021 with a sharply enhanced focus on solutions related to the regulated pharmaceutical and medical market segments where it believes its patented technology will offer the highest value and utility.

Lexaria focusing on four core business segments:

• Heart disease including hypertension;
• Reduced-risk non combusted nicotine;
• Improved anti-viral drug delivery;
• CBD (cannabidiol) from hemp.

Lexaria will concentrate its patented DehydraTech drug delivery technology on four core areas of business with out-licensing strategies to existing drug manufacturers:

• Heart disease including hypertension utilizing CBD;
• Reduced-risk methods of delivering non-combusted nicotine;
• Improving anti-viral drug delivery for applications that include COVID-19, influenza, herpes, hepatitis and AIDS;
• Hemp-based CBD business-to-business (B2B) applications for non-pharmaceutical consumer and therapeutic or medicinal products and prospective pharmaceutical indications beyond hypertension.

Heart disease and hypertension

The current global market size for drugs used to treat various heart diseases is $47.29-billion and anti-coagulants, anti-hypertensive and anti-hyperlipidemic drugs comprise roughly 90 per cent of these. Broad trends including aging populations and obesity are expected to contribute to growth in demand for heart-disease-related drugs, where demand is expected to reach $63.96-billion by 2026.

Cardiovascular disease caused 840,678 deaths in the United States during 2016 and more than one-third of all Americans suffer from some form of cardiovascular disease. The three leading companies in the cardiovascular drug market are thought to be Bristol-Myers Squibb, Pfizer and Janssen Pharmaceuticals.

Lexaria has already demonstrated in a pilot human clinical study, published in a peer-reviewed medical journal in 2019, that its DehydraTech processed cannabidiol (CBD) was associated with a statistically significant slight decrease in human blood pressure, theorized to have occurred as a result of the known vasodilatory potential of CBD. As a complex fat-soluble molecule, generic CBD is known to have poor absorption characteristics, such that typically only about 6 per cent of what is orally ingested actually finds its way into blood circulation. Lexaria's technology has shown an ability to increase this absorption into the blood circulation by between 100 per cent to 500 per cent.

Lexaria is expecting to commence a second exploratory human clinical study intended to corroborate and expand on the findings of the original pilot study. Clinical test articles have been manufactured and are ready for shipment to the clinical site pending regulatory clearance for importation purposes. If this study is successful, Lexaria will then begin systematic outreach to some of the world's participants in the cardiovascular disease drug industry to introduce DehydraTech's enhancement technology.

Lexaria's DehydraTech is patent granted in the European Union and Australia for treatment of heart disease utilizing CBD, and the company continues to seek international expansion of its patent protection utilizing CBD throughout the world.

Reduced risk non-combusted nicotine

Through a series of animal and human volunteer studies, Lexaria has repeatedly evidenced that its DehydraTech technology significantly increases both the speed and ability of orally administered nicotine to reach the blood circulatory system and to cross the blood-brain barrier. Lexaria's own limited human testing utilizing its most recent 2020 powdered nicotine formulations appear to demonstrate nicotine absorption and onset of nicotine effectiveness in as little as 1.5 to four minutes after an oral dose.

The global tobacco market is expected to be valued at $1.08-trillion by 2027, making it one of the largest industries in the world. Combustible tobacco demand is shrinking by 2 per cent per year, while demand for non-combusted alternative is growing at approximately 10 per cent per year. The nicotine replacement therapy market size in 2019 was $2.55-billion and is expected to reach $3.54-billion by 2027.

There are an increasing number of alternatives to combustible tobacco experiencing dramatic growth in demand as consumers search for reduced risk method nicotine options, including the e-cigarette market, currently valued at $12.41-billion and projected to reach $68.48-billion by 2027; as well as the nicotine oral pouch market, currently valued at $2.37-billion and expected to reach $32.77-billion by 2026.

Products in the oral pouch category were the first nicotine products in the history of the Food and Drug Administration to be authorized through the modified risk tobacco product pathway approved for claims of a lower risk of mouth cancer, stoke, lung disease, heart disease, emphysema and chronic bronchitis than cigarettes.

Lexaria has been successful in developing relationships with two of the world's largest tobacco companies, Altria Ventures Inc. and British American Tobacco. Lexaria has also engaged in business dialogue with other tobacco and nicotine companies located in various parts of the world. Lexaria's DehydraTech is patent granted in the United States, the European Union and Australia for oral delivery of nicotine.

Anti-viral drugs

Early in 2020 Lexaria initiated early-stage research into the prospective applicability of DehydraTech technology related to improved delivery characteristics of a number of existing anti-viral drugs. Because DehydraTech has repeatedly evidenced an ability to more efficiently deliver lipophilic CBD and nicotine, Lexaria first began postulating in 2019 that the technology may have applicability for a range of applications in the traditional pharmaceutical sector.

Viral-caused diseases such as HIV, hepatitis, influenza and coronavirus remain common and at times reach pandemic proportions. Hepatitis caused 1.3 million deaths in 2015; influenza had 13 million cases reported in 2019 in the U.S. alone; and COVID-19 has infected over 48 million people worldwide during 2020 and is currently infecting more than 500,000 people per day. Additionally, there are currently 37.9 million people worldwide infected with HIV/AIDS.

Vaccines help prevent the transmission of -- but do not treat -- viral diseases and generally have effectiveness rates of between 50 per cent and 80 per cent. Anti-viral drugs will always be needed to treat people who become infected and are at risk of serious health consequences with viral diseases, and in many cases are the difference between life and death. The anti-viral drug market is currently $52.2-billion and expected to grow to $75.3-billion by 2027. Some of the largest companies competing in the anti-viral drug market include Abbvie; Gilead Sciences; GlaxoSmithKline; and Merck and Co.

Many anti-viral drugs are currently administered via injection, a process usually requiring a health care professional that introduces expense and complication for mass dosing. Lexaria believes it is possible that DehydraTech could improve delivery performance such that some of these drugs could be dosed via oral tablet or capsule which is less expensive and makes it easier and less expensive to treat more patients in less time. To date, DehydraTech has been clinically studied only with CBD and nicotine as potential active pharmaceutical ingredients (APIs) and the results of these studies may not be predictive of the results of subsequent trials incorporating other APIs. Therefore, the company is not certain if DehydraTech will improve delivery of or be compatible with existing or future anti-viral therapies, including those used to treat COVID-19.

Lexaria has designed a human clinical pilot study to test the effectiveness of DehydraTech in delivering higher proportions of anti-viral drug into the human blood stream, versus otherwise identical non-DehydraTech-processed anti-viral drugs. Hospital ethics board approval has been received to conduct this study, conditional on further federal government approval which the company is evaluating the necessary steps to pursue.

Lexaria has significantly advanced an early-stage research-and-development-focused rodent-based pharmacokinetic (PK) study to test DehydraTech's ability to deliver a higher proportion of existing anti-viral drugs into animal blood circulation with animal dosing already completed and data analyses expected to commence shortly. For both the human study and the animal study, two drugs have been selected that are representative of two leading possible classes of drugs currently being examined by others as potential treatments for COVID-19. PK study outcomes are almost always needed as part of a data package to present to established drug companies in hopes of future collaboration. Lexaria's technology is currently patent pending for use with anti-viral drugs.

CBD from hemp

Lexaria has previously reported growth in its CBD B2B processing division of more than 500 per cent this year between its fiscal fourth quarter ended Aug. 31, 2020, and fiscal first quarter ending Nov. 30, 2020. Third party corporate demand for DehydraTech to improve the delivery and performance characteristics of CBD has exceeded expectations. Lexaria has previously sold direct-to-consumer CBD-related products of only thousands of servings per quarter. Demand from corporate purchasers for DehydraTech-enabled CBD powders, in contrast, is expected to exceed eight million servings during the current quarter and is expected to continue to rise into 2021. As a result, Lexaria's hemp business division intends to discontinue the sale of its direct-to-consumer CBD products and will focus on the high-growth B2B CBD powder processing segment, and on continued outlicensing of its intellectual property to generate royalty revenues from third party companies seeking to improve their consumer's experiences by utilizing Lexaria's technology for their hemp-derived CBD product offerings.

The global CBD market was estimated at $4.6-billion in 2018, growing rapidly and expected to reach $23.6-billion in 2025. Although the CBD market size is smaller than the other opportunities under pursuit by the company, the company's technology was first developed to enhance the delivery of CBD and the company has an established business presence within the sector that is experiencing revenue growth.

Many studies are under way around the world investigating CBD for potential treatment of several medical conditions including opioid and other substance abuse, anxiety and more. In harmony with the increased scientific investigation, CBD is also gaining recognition as a regulated drug with significant medical potential. For example, Epidiolex generated $296-million in revenue for its owner, GW Pharmaceuticals, during 2019. Epidiolex is regulated by the FDA as a treatment for certain forms of childhood epilepsy, a central nervous system disorder.

Lexaria's DehydraTech is patent granted in the European Union and Australia for treatment of a range of central nervous system disorders using CBD and, as previously noted, Lexaria continues to seek international expansion of its patent protection utilizing CBD.

Chris Bunka, chief executive officer, is responsible for the accuracy of this news.

The company is not making any express or implied claims at this time that its products or technology have the ability to eliminate, cure or contain COVID-19 (or SARS-2 coronavirus) nor any other therapeutic drug indication.

About Lexaria Bioscience Corp.

Lexaria Bioscience's proprietary drug delivery technology, DehydraTech, improves the way active pharmaceutical ingredients (APIs) enter the bloodstream by promoting healthier oral ingestion methods and increasing the effectiveness of fat-soluble active molecules, thereby lowering overall dosing. The company's technology can be applied to many different ingestible product formats, including foods, beverages, oral suspensions, tablets and capsules. DehydraTech increases bio-absorption by up to five to 10 times, reduces time of onset from one to two hours to minutes, and masks unwanted tastes for orally administered bioactive molecules, including anti-virals, cannabinoids, vitamins, non-steroidal anti-inflammatory drugs (NSAIDs), nicotine, and other molecules. Lexaria has licensed DehydraTech to multiple companies including a world-leading tobacco producer for the development of smokeless, oral-based nicotine products and for use in industries that produce cannabinoid beverages, edibles, and oral products. Lexaria operates a licensed in-house research laboratory and holds a robust intellectual property portfolio with 18 patents granted and approximately 60 patents pending worldwide.

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