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COWEN COLLABORATIVE INSIGHTS February 25, 2019 iii. Various combinations of the aforementioned precursors then combine in the third pathway to yield parent cannabinoid molecules (e.g., cannabigerolic acid or CBGA). iv. These parent cannabinoids are then modified in the fourth pathway to produce cannabinoids such as tetrahydrocannabinolic acid (THCA) and cannabidiolic acid (CBDA). These acids can be transformed into a non-acid form using synthases, producing the terminal cannabinoid form. Figure 11 Biosynthetic Cannabinoid Production Pathways Glucose Pyruvate @= Acetyl-CoA @== TCA Cycle Source: Cowen and Company Cannabinoid Production Using Fermentation To power the aforementioned pathways, water and glucose (or a cannabinoid substrate) are added to the microbe (e.g., yeast) in a bioreactor. Under fermentation, the yeast will consume the glucose and produce the desired cannabinoid. This culture is incubated for ~3-5 days to produce sufficient cannabinoid intermediaries. Afterwards, the fermentation mixture is separated and combined with a non-toxic solvent to extract and purify the cannabinoids. Recent Cannabinoid Partnerships In Synthetic Biology With the recent legalization of cannabis in several countries and U.S. states and growing acceptance of its utility, many recent notable partnerships have been created on the potential of synthetic cannabinoid production. We highlight two such agreements from the past few months below. Amyris / Undisclosed Partner (February 2019; Valued Up to $255MM) In February 2019, Amyris announced that it has signed an agreement for cannabinoid development, licensing, and commercialization in a partnership valued at up to $255MM (not including royalties for commercial products) with an undisclosed partner. The $255MM in payments include an upfront payment and the remainder is linked to milestones that are expected over the next 12-36 months. The partner is expected to provide initial, lab-based and later commercial-scale milestone cash payments in tranches for the development and scaling of technology to produce CBD. 20 COWEN.COM HOUSE_OVERSIGHT_024836