WILLOW BIOSCIENCES REPORTS FOURTH QUARTER AND FISCAL YEAR 2022 FINANCIALS AND OPERATIONS AND FILING OF ITS 2022 AIF

Reports Highest Quarterly and Annual Revenue in Company History with Significant Year-Over-Year Growth Expected for 2023

CALGARY, AB and MOUNTAIN VIEW, Calif., March 21, 2023 /CNW/ - Willow Biosciences Inc. ("Willow") (TSX: WLLW) (OTCQB: CANSF), a leading biotechnology company focused on revolutionizing industrial manufacturing of pure, consistent and sustainable functional ingredients is pleased to announce its financial and operating results for the three months and year ended December 31, 2022, and filing of its Annual Information Form ("AIF"). Selected financial and operational information is outlined below and should be read with Willow's audited consolidated financial statements (the "Financial Statements") and management's discussion and analysis (the "MD&A") as of December 31, 2022, which are available on SEDAR at www.sedar.com.

"Fiscal 2022 was a transformative year for Willow as we took significant steps to position the company for nearer term revenue creation, and more rapid and diversified commercial growth, all with a reduced cash burn," said Dr. Peter Seufer-Wasserthal, Willow's President and CEO. "The result of these activities was our ability to successfully deliver on certain key milestones while posting the highest quarterly and annual revenue in the Company's history. We are proud of Willow's R&D team's dedication and execution and excited to showcase our capabilities in 2023 while delivering what we believe will be significant revenue growth and overall improved financial results."

Highlights for the Quarter

• Added a new functional ingredient, astaxanthin, to the Company's product portfolio.
• Signed a Master Services Agreement with Kalsec Inc, a leading global producer of natural taste and sensory, food protection, colors and advanced hops ingredients for the food and beverage industry to develop and commercialize a precision fermentation production process for a high volume, natural food opportunity. The program has progressed well with the recent completion of the first phase of development.
• Transitioned to be well positioned for near-term revenue generation, while protecting its balance sheet and reducing cash burn. This resulted from significant steps Willow took to consolidate and centralize R&D operations to reduce overall costs, outsource its internal Quality Control analytical testing and release requirements and eliminate certain full-time employees.
• Completed Phase I of Company's partnered project with Sandhill One, LLC ("Sandhill") to develop a process for the manufacture of the large volume Active Pharmaceutical Ingredient ("API"), ursodeoxycholic acid (UDCA). Sandhill is partnered with a large-cap, multi-national healthcare Company. In January 2023, Willow announced completion of the first phase and a follow-on engagement for the next phase leading to commercial performance in the project representing early progress against Willow's goals for growth in 2023.
• Willow ended the quarter with strong liquidity, including approximately $15 million of cash and short-term investments as of December 31, 2022, with the Company's approved annual budget expected to be fully funded for 2023.
• The Company reported record revenue of $821,000 for the year and $510,000 for the fourth quarter of 2022, marking the highest level of revenue reported for any quarterly or fiscal year period in Willow's history.
• Willow continues to be on target for achieving the 2023 milestones outlined in its December 14, 2022 press release:
• First large-scale batch of CBG produced at the Company's new CMO for existing and new customers.
• In March 2023, the Company initiated its fist large-scale pilot runs in support of upcoming commercial production batches.
• Based on existing data, expect attaining independent conclusion of generally recognized as safe ("GRAS") for Willow's CBG. In February 2023, the Company completed its pivotal 90-day oral toxicity studies showing Willow's CBG was safe at the tested dose levels. Additional details to be released in near term.
• Anticipated milestone payments for technology transfer of the Company's first two partnered projects.
• At least one new partnered development program for a functional ingredient.
• Astaxanthin strain wholly owned by Willow expected to be productive enough to start downstream process development.

Business Outlook for 2023

With the Company's success in executing on its 2022 milestones and the anticipation that it will successfully execute on those targeted for 2023, Willow currently expects rather significant revenue growth over 2022 along with a demonstrable reduction in cash burn toward its goal of noted improvement in bottom-line financial results.

About Willow Biosciences Inc.

Willow develops and produces precision fermented functional ingredients for the health and wellness, food and beverage and personal care markets. Willow's FutureGrown^TM biotechnology platform allows large-scale production with sustainability at its core. Willow's R&D team has a proven track record of developing and commercializing bio-based manufacturing processes and products to benefit our B2B partners and their customers. For more information, visit www.willowbio.com.

FutureGrown™ is a registered trademark of Willow Biosciences Inc. All other trademarks are trademarks of their respective holders.

Forward-Looking Statements
This news release may include forward-looking statements including opinions, assumptions, estimates and the Company's assessment of future plans and operations, and, more particularly, statements concerning: the ability to accommodate new programs and to expand R&D capabilities with new partners and customers; the demand and market size potential of the synthetic ingredients industry; expectations regarding year over year growth in 2023, including significant revenue growth and overall improved financial results; Willow's 2023 budget and anticipated expenditures; the achievement of 2023 milestones; and the business plan of the Company, generally, including becoming a leader in precision fermentation, research and production of functional ingredients. When used in this news release, the words "will," "anticipate," "believe," "estimate," "expect," "intent," "may," "project," "should," and similar expressions are intended to be among the statements that identify forward-looking statements. The forward-looking statements are founded on the basis of expectations and assumptions made by the Company which include, but are not limited to: the success of Willow's strategic partnerships and customer relationships, including the development of future strategic partnerships and customer relationships; the financial strength of the Company; the ability of the Company to fund its business plan using cash on hand and existing resources; the market for Willow's products; the ability of the Company to obtain and retain applicable licences; the ability of the Company to obtain suitable manufacturing partners and other strategic relationships; and the successful implementation of Willow's commercialization and production strategy, generally. Forward-looking statements are subject to a wide range of risks and uncertainties, and although the Company believes that the expectations represented by such forward-looking statements are reasonable, there can be no assurance that such expectations will be realized. Any number of important factors could cause actual results biotechnology industry in general; the success of the Company's research and development strategies; infringement on intellectual property; failure to benefit from partnerships or successfully integrate acquisitions; actions and initiatives of federal and provincial governments and changes to government policies and the execution and impact of these actions, initiatives and policies; import/export and research restrictions for cannabinoid-based operations; the size of the medical-use and adult-use cannabinoid market; competition from other industry participants; adverse U.S., Canadian and global economic conditions; adverse global events and public-health crises, including the evolving COVID-19 outbreak; failure to comply with certain regulations; departure of key management personnel or inability to attract and retain talent; and other factors more fully described from time to time in the reports and filings made by the Company with securities regulatory authorities. Please refer to the Company's most recent annual information form and management's discussion and analysis for additional risk factors relating to Willow, which can be accessed either on Willow's website at www.willowbio.com or under the Company's profile on www.sedar.com.

The forward-looking statements contained in this news release are made as of the date hereof and the Company does not undertake any obligation to update publicly or to revise any of the included forward-looking statements, except as required by applicable law. The forward-looking statements contained herein are expressly qualified by this cautionary statement.

SOURCE Willow Biosciences Inc.

Travis Doupe, Chief Financial Officer, [email protected]