The offering will be marketed by a syndicate of underwriters led by Canaccord Genuity Corp. and will be priced and sized in the context of the market, with such terms including the offering price of the units and the exercise price of the warrants to be determined at the time of entering into an underwriting agreement for the offering.

The underwriters will be granted an over-allotment option to purchase up to an additional 15% of the units offered pursuant to the offering on the same terms and conditions for a period of 30 days following and including the closing date of the offering. The over-allotment option may be exercised by the underwriters to acquire units, unit shares and unit warrants.

Khiron will apply to list the unit shares and the warrant shares to be issued upon exercise of the unit warrants on the TSX Venture Exchange (TSXV). The listing will be subject to Khiron fulfilling all of the requirements of the TSXV.

The net proceeds of the offering will be used for general corporate and working capital purposes. Closing of the offering will be subject to a number of customary conditions such as, receipt of all necessary regulatory approvals and stock exchange approvals, including approval of the TSXV and the entering into of an underwriting agreement with the underwriters.

The offering is being made in the provinces and territories of Canada except Quebec, and in the United States on a private placement basis compliant with exemptions from the registration requirements of the United States Securities Act of 1933. The units will be offered in each jurisdiction through those underwriters or their affiliates who are registered to offer the units for sale in such jurisdiction and such other registered dealers as may be designated by the underwriters.

The Offering is expected to close on June 10, subject to the satisfaction of customary closing conditions and the receipt of regulatory approvals, including the approval of the TSXV. The offering will be conducted pursuant to a prospectus supplement to the company’s existing Canadian base shelf prospectus dated May 21, 2021filed with the securities regulatory authority in each of the provinces and territories of Canada.

Khiron states that this is the largest study of its kind in Latin America, and the first published clinical evidence on the effectiveness and safety of Khiron’s THC and CBD oil-based cannabis formulations, the two most prescribed products at Khiron’s Zerenia Clinics in Colombia. Frontiers journals rank among the most influential in their academic fields based on total citations and ranks as the 3rd most-cited publisher among the 20 largest publishers.

The study, a joint effort by medical researchers from Khiron Life Sciences and doctors from Zerenia Clinics in Colombia and Europe, captures patient-reported outcome measures (“PROMS”) and adverse effects in a cohort of 2112 adult patients diagnosed with chronic pain of diverse etiology. Between May and September 2021, patients received adjuvant treatment with Khiron’s oral oil-based cannabis formulations at the Latin American Institute of Neurology and Nervous System (ILANS-Zerenia) in Bogotá, Colombia.

• 9 out of 10 patients reported some degree of improvement of their chronic pain.
• 7 out of 10 reported an improvement larger than 50% after 4 weeks of treatment.
• 7 out of 10 patients did not experience any adverse effects related to the treatment. Reported adverse side effects were mild and transient, fading after 12 weeks.

Khiron Life Sciences CEO & Co-Founder Álvaro Torres

“This study, based on Khiron’s medical products, is critical to reassure physicians and health insurance providers of the efficacy of medicinal cannabis to treat chronic pain. The global impact and economic burden of chronic pain in our society, mounting medical evidence will increase access to cannabinoid-based medicines worldwide,” said Khiron CEO Alvaro Torres. “The recent vote in the US House of Representatives promoting medical research on cannabis clearly shows the pressing need to develop effective and safe cannabis-based medication for suffering patients worldwide. With this and upcoming studies, Khiron will continue to stand above in the field of medical research and to expand the access for patients in those jurisdictions in which we are present”.

Guillermo Moreno-Sanz, the first author of the study and Global Scientific Director of Khiron Life Sciences adds, “We believe these findings to be generalizable across patient populations, considering that our results are extremely well-aligned with those reported by researchers working with similar clinical populations in nations with long-standing medicinal cannabis access programs, such as Israel and Canada.”

Khiron claims most observational and experimental studies investigating the efficacy of medical cannabis for pain management are of relatively short duration and use a disparity of cannabinoid-based products, routes of administration, and dosing regimens, but this study is differentiated as it describes the short-, mid- and long-term efficacy and safety of two monovarietal formulations containing THC and CBD in different ratios (1:1 and 1:25, respectively), and investigates the contribution of patient’s sex, and age. Most participants were female (76.1%) with an average age of 58.7 years old. One third of the participants were elderly (>65 years old).

As Khiron continues to expand its research and business globally through Latin America and Europe, the company says additional studies are expected to continue to demonstrate the Company’s business model, creating a 360-solution for health care providers, insurance companies, and patients to benefit from the prescription and positive health outcomes from medical cannabis.

See also: Khiron Life Sciences CEO Álvaro Torres Discusses The Cannabis Company’s Unique Go-To-Market Strategy & Its Network Of Zerenia Integrative Care Clinics

“We are very excited about this new Zerenia format and our ability to treat more patients and create closer relationships with insurance companies in Colombia. Our Zerenia clinic network now has more than 13 locations in Colombia, Peru, and the UK, and we will soon open new locations worldwide. Our unique strategy has allowed us to grow medical cannabis sales by more than 900% in Colombia in 2021, increasing patient conversion and retention rates,” said Khiron CEO Álvaro Torres.

“The selection of this new location follows a deep desire to be closer to our patients and offer insurance companies better access for their patients while maintaining the service standards that are making Zerenia a leading global medical cannabis clinic network. Now that the Colombian Government has mandated medical cannabis to be covered by all insurance companies, we believe this new location strategy will continue to drive great growth and profitability for Khiron and will continue to allow us to improve the quality of life of more patients.”

Khiron retains investor relations firm

Khiron also announced that subject to the approval of the TSX Venture Exchange, it has retained Arrowhead Business and Investment Decisions, LLC, a US-based investor relations firm which is headquartered in New York City and was established in 2008. For the initial six-month term, Arrowhead will be paid $50,000 USD. Khiron said in a written statement that Arrowhead is not related to the company and has no interest, directly or indirectly, in Khiron or its securities.

In 2020, 184 medical formulations and 22 health procedures were covered, but Resolution 2292 of 2021, issued by Colombia’s Health Ministry December 23, adds 654 more medical procedures to the reimbursement list. The Colombian health ministry says that 97% of coded procedures carried out in Colombia are now covered, along with 309 clinical laboratory tests.

Added to the list are procedures for the management of hearing loss, for dental care and oral rehabilitation, state-of-the-art radiotherapy for the management of cancer, procedures for the care of cardiovascular and respiratory diseases, neuropsychology procedures, organ transplants, eye disease care, and in-utero fetus interventions.

Active pharmaceutical ingredients covered have gone from 459 to 1059, representing almost 35,000 unique drug codes (CUMS), or coverage for 89% of all unique drug codes prescribed in Colombia.

To download the entire resolution (Spanish) click here.

“Medications are included for pathologies with a great impact on the health status of the Colombian population, such as arterial hypertension, kidney disease, plus pharmacological options for different types of cancer: gliomas, sarcoma, myelomas, lymphomas, leukemia, melanoma, skin cancer, breast cancer, lung cancer, head and neck cancer, colon and rectal cancer, among others,” said the Deputy Minister of Social Protection, María Andrea Godoy Casadiego (above photo).

The deputy minister said the expanded list now includes more medications for respiratory, dermatological, cardiovascular diseases, more contraceptive options for women, medications for pain management, osteoarthritis, mental illnesses, medications for use in ophthalmology, immunodeficiencies, antibiotics, plus pharmaceutical formulations for special populations such as children and older adults, and more combinations at fixed doses that improve adherence to treatment and allow fewer doses.

Medical Marijuana Covered

Medical marijuana derivatives are included in the expansive resolution for the first time, meaning that the Colombian government mandates EPS coverage for prescribed CBD and THC cannabis derivatives. Psychoactive THC medicines remain strictly regulated.

Certain private insurance providers had already begun to cover certain cannabis-based treatments.

“We have worked with insurance companies across the country to include this medication in their administrative systems. In 2021, 60% of our products were sold through agreements with two major insurance providers. Today, all insurance companies are mandated to cover medical cannabis in Colombia, with less paperwork and hassle for patients,” said Álvaro Torres, CEO of cannabis products firm Khiron Life Sciences Corp. ( (TSXV: KHRN), (OTCQB: KHRNF).

Along with its subsidiary, Zerenia Clinics, Torres says the company has filled over 57,000 prescriptions for 16,000 individual patients after Colombia authorized (but did not mandate) coverage of the medications under health insurance plans.

On November 23, 2021, the board of directors granted a total of 1,400,000 options and 950,000 restricted stock units to certain officers of the company. Certain of the options and restricted stock units are subject to performance-based vesting conditions. The options are exercisable at a price of $0.75 per share and will expire on November 23, 2026. Unvested restricted stock units will expire on December 15, 2024.

Khiron has a sales presence in Colombia, Peru, Germany, UK, and Brazil and is positioned to commence sales in Mexico. The company is led by Co-founder and Chief Executive Officer, Alvaro Torres, together with a diverse executive team and board of directors.

Khiron to Participate in the Lytham Partners Winter 2021 Investor Conference

Khiron also announced today its CEO, Alvaro Torres will be participating in the Lytham Partners Winter 2021 Investor Conference taking place from December 13-16, 2021. During the event, the company will be participating in a webcasted Fireside Chat discussing its vision for 2022 and conducting 1×1 virtual investor meetings.

The webcasted Fireside Chat will be available for viewing at 11:00am ET on Monday, December 13, 2021 on the Company’s website at https://investors.khiron.ca/investor-information or https://wsw.com/webcast/lytham3/khrn/2039430. The webcast will also be available for replay following the event.

The company, led by CEO and Co-Founder Álvaro Torres, said in a SEDAR filing that Europe now makes up 31% of medical cannabis revenue. Gross margins increased for clinical services to 26% of revenues, up from 12% in Q3 of 2020, and 15% in Q2 2021. Net loss is down 50% year over year to $3.3 million CAD compared to $6.7 million in Q3 2020. The company reports $15.4 million in cash on hand as of September 30, 2021.

“In Q3, we achieved strong results and broke revenue and profitability milestones, surpassing our first million dollars in medical cannabis revenues and gross profits. Prescription growth were driven by our patient-focused operations in Colombia and Germany. In the first 9 months of 2021, we have already exceeded 2020 medical cannabis sales by more than 600% while maintaining medical cannabis margins of over 89%,” said Torres.

“As expected, Europe is becoming a more significant region for Khiron, representing 31% of our medical cannabis revenue. With the opening of Zerenia Clinics in the UK, we have now established an international clinic footprint that will continue to drive sustainable growth in the future. A year ago, our company was just starting medical cannabis sales in Colombia, and now we have 15 clinics in 5 countries, and soon in Mexico. We are very excited about our quarterly growth rate, and the growing evidence that Khiron is fulfilling its mission to improve the quality of life of our patients.”

Above photo: Khiron’s agricultural facilities in Ibagué, Tolima, Colombia (courtesy Khiron)

The study, entitled “Prescription patterns and clinical outcomes in a cohort of patients receiving progressive therapy with cannabinoids for medical use in Colombia“, is a longitudinal, retrospective cohort study including 1,453 patients receiving treatment with medical cannabis at Khiron-owned Zerenia and ILANS (Latin American Institute of Neurology & Nervous System) clinics in Colombia.

The scope of research was to capture patient-reported outcome measures (PROMS) and patient-reported experience measures (PREMS) of general efficacy, adherence, and side effects of oral formulations ranging in cannabinoid content for the treatment of different health conditions with a diverse patient base over a twelve-month period.

“Scientific research and data are key to convincing doctors and policy makers all over the world about the benefits of medical cannabis to treat conditions that are prevalent in every society and market we are targeting. After one year of compiling information and having gone through a very detailed approval process, we are very proud to share the results from this first-of-its-kind clinical study in Latin America with such a significant patient base,” said Khiron CEO Álvaro Torres.

The research protocol was reviewed and approved by the Scientific Institutional Committee and the Research Ethical Committee of the Universidad del Bosque, in Colombia, one of the leading institutions on medical research in the region.

“This is just the beginning of our ongoing research program. We are looking forward to sharing the outcomes of this first cohort study with the international medical audience through peer-reviewed, specialized publications so doctors all over the world can continue to drive prescription growth safely and responsibly,” added Torres.

Demographic results reported most patients were female (73%) and with an average age of 59.3 years old, in strong contrast with results arising from Project T21, the UK’s first medical cannabis registry that Khiron Life Sciences has been supporting since its foundation in 2019. Patients in the study were mainly diagnosed with chronic, non-cancer pain (77%), followed by nausea and vomiting (8%), insomnia (6%), anxiety (5%), spasticity and depression, among other symptoms. and up to 68 % of patients had their medical cannabis prescription cost covered by government health insurance in Colombia. Study results show a patient-reported positive clinic response in more than 80% of participants with only minor side-effects associated to the treatment.

“Our integrated clinic model continues to connect patients, doctors, and insurance, helping improve patient outcomes.  The integrated medical clinic approach offers a range of treatments and services, including medical cannabis, that help patients save time and money by not having to travel to seek out individual treatments.   Almost half of our patients have insurance coverage now, a tremendous improvement since our first covered prescription in December of 2020,” said CEO Alvaro Torres

Medical Cannabis

Latin America

• Medical cannabis prescriptions grew by more than 40%, from Q2 2021
• Year to date medical cannabis prescriptions have exceeded 35,000 units, 600% more than the entire 2020 fiscal year
• Total medical cannabis patients in Q3 increased to more than 9,600, up 32% from Q2 2021
• 62% of the patients in Q3 were returning patients, up 35% from Q2 2021
• 47% of units sold were covered by insurance
• New satellite clinics accounted for 10% of prescriptions

Europe

• Europe generated 30% of the company’s medical cannabis sales in Q3 2021
• Germany revenues expected to grow more than 80% and UK revenues expected to grow more than 70% quarter on quarter
• The company has increased its imported volumes in the U.K., ensuring uninterrupted supply for all Khiron patients

Health Services

• Year to date patient visits at Khiron clinics have exceeded 104,000, topping all patient visits in 2020
• Revenue in health services is steadily returning to normal at Zerenia clinics as pandemic measures ease
• Total quarterly patient visits at Zerenia were up 18% quarter on quarter
• Khiron will expand its flagship clinic brand, Zerenia to the UK, with the first Zerenia opening in London in Q4 2021.

“Through the end of Q3, the company continued to make steady progress in helping more patients access medical cannabis. Europe is starting to become an important market for the company, and we will soon be opening our first Zerenia medical cannabis clinic in the UK,” added Torres.

October Investor Conferences

Khiron also announced it will be participating in the MJBIZ Conference on Thursday, October 14th at 4:00 pm ET as a member of the panel ”The Latin American Cannabis Supply Chain: Do’s, Don’ts and Industry Domination” and also the Benziga Cannabis Capital Conference on October 15^th at 3:45pm ET along with a Virtual executive interview with Khiron board member and former President of México, Mr. Vicente Fox: Thursday, October 14th & 15th at 1:10 p.m ET

The panel hosting Khiron is titled “International Spotlight – Continued Cannabis Expansion in European Markets,” and will be Friday, October 15th at 2:10 p.m ET

Khiron’s report outlines actions and initiatives undertaken in 2020 to strengthen ESG practices throughout the company’s operations and supply chain, along with Khiron’s goals for 2021 and 2022.  Khiron says the report adheres to global reporting initiative (GRI) standards and reflects the alignment of Khiron’s goals with the United Nations Sustainable Development Goals. A full copy of the report is available here.

“At Khiron, sustainability is embedded in our DNA, with the common belief that strong ESG policies improve performance, loyalty, and innovation, while reducing corporate risks and capital costs. Our inaugural ESG report demonstrates our dedication to strong environmental, social and governance principles as we deliver on our mission of improving lives through cannabis. I am proud of how our team rose to the challenges of 2020, achieving incredible milestones in an unprecedented year,” said CEO and co-founder Alvaro Torres.

“Increasingly, institutional investors are using ESG principles to guide investment decisions, and as one of the first global cannabis companies to publish an ESG report, we have achieved another corporate milestone that distinguishes us as an industry leader and market disruptor. We have set ambitious ESG goals for the next two years and I am confident our team will deliver on these objectives,” added Torres.

2020 ESG Highlights

1. Conducted initial identification and assessment of material environmental, social, economic and governance issues, resulting in the identification and prioritization of 10 overarching goals in alignment with United Nations Sustainable Development Goals.
2. Identified eight key stakeholder groups impacted or influenced by Khiron, including shareholders, employees, patients, clients, local communities, the environment, suppliers, and government.
3. Commissioned solar park to reduce energy consumption at production facility by up to 40%, while implementing initiatives to measure and reduce consumption of resources, including energy, water, and materials.
4. Supported local communities during COVID-19 crisis by donating COVID-19 PCR testing equipment to the Santa Clara Hospital in Bogota; in addition, provided nutritional kits to vulnerable families, essential medical supplies to local hospitals, and COVID-19 training and support to community health care practitioner.
5. Secured 88% of production supplies from local suppliers and employed 74% residents at Khiron’s production facility.
6. Had a positive impact on local communities, with 61% of surveyed residents indicating that Khiron has had positive impact on the community.
7. Achieved wage parity between men and women in Khiron’s workforce, while fostering a diverse and inclusive workplace.
8. Promoted culture of compliance and robust corporate security; improved voluntary incident reporting by over 135x, conducted over 35 employee training sessions related to Khiron’s ESG goals, and had no regulatory infractions.
9. Leveraged a culture of innovation and adaptability, pivoting quickly in response to the COVID-19 crisis, rapidly developing telemedicine channels, managing supply chain to ensure patients received medications and reprioritizing capital.

In 2020, global sustainable funds attracted more than $150 billion in fund flows with COVID-19 serving as a catalyst for sustainability investing (Source: Morningstar). Additionally, according to RBC Global Asset Managements’ Responsible Investment Survey 2019, 70% of institutional investors surveyed use ESG principles when they invest. The top 3 reasons to apply ESG principles when investing were cited as (1) lower risks, (2) improved returns, and (3) acting in clients’ interests.

Khiron plans to launch its Zerenia clinics across Mexico in 2021, building on the success of its vertically integrated model in Colombia and Peru, & leveraging its education partnership with Tecnologico de Monterrey.

“Our goal is to improve the lives of 1 million patients by 2024, and Mexico remains a very important part of that plan. Thanks to our status as a National Strategic Project, Mexico is now a destination country within our international THC quota, which is expected to accelerate first sales by several months. In addition, we have secured a world class partner that will not only manufacture finished products on our behalf, but also assist with the import and export process. As we continue to advance our proven Zerenia clinic strategy in Mexico, we look forward to delivering our first products to patients in the coming months,” says CEO Alvaro Torres.

Mexico represents a significant market for the Khiron, as a top 15 global economy with a population of nearly 130 million. To date, close to 550 physicians in Latin America have obtained their diploma accrediting completion of Khiron’s medical education program, in partnership with Tecnologico de Monterrey, one of the most prestigious universities in Mexico.