Willow Bioscience has become the second company, after Hyasynth Bio, to start ‘rolling-out’ biosynthetically produced cannabinoids. I’ve written about Willow Bio before, covering their origins and unique disclaimers in forward looking statements.
When I evaluate companies involved in R&D the only window I typically get into their operations is through patents, few publish their results in peer reviewed journals. In several cases, Willow Bio included, companies talk extensively about their patents in press releases and when I go looking for them I can’t find them. Patents must be made public so people have the opportunity to read them and not infringe on the claims made. The only reason a patent wouldn’t be publicly available is if it’s early in the application process and hasn’t been published online yet. If you search for “Willow Biosciences” in the patent database, all you see are the opioid patents they acquired through purchasing Epimeron.
I may not be able to find their cannabis patents, but I can look at their financial statements to see how they’re valuing their patents. From three quarter ago we received this breakdown of their patents:
We’ll use the above as our benchmark as we go through time. Two quarters ago was the first time they mentioned a cannabis patent and separated the value of their opioid patents from their ‘cannabis patent’:
In the press release discussing the above quarter Willow Bio had this to say:
The routine impairment of patents related to opioid biosynthesis appears separate from the appearance of a ‘cannabis patent’ two quarters ago. Since Willow Bio doesn’t visibly own any cannabis patent, it appears as though the filing of the patent applications two quarters ago are the only patents being considered when attributing a carrying value of $392,903 to ‘the cannabis patent’. In the press release Willow claims these patent applications only contain protections for a system that increases cannabinoid production in yeast, which begs the question, what pathway are they using to make cannabinoids when the pathway found in plants is patented? Without seeing the patent applications they just filed I can’t evaluate with certainty that they’re infringing on existing patents, but their unique disclosure and speed of development is suspect.
Canopy learned the dangers of associating value to patent applications the hard way, I fear Willow’s investors will learn a harder lesson in the future.
The preceding is the opinion of the author, and is in no way intended to be a recommendation to buy or sell any security or derivative. The author holds no position in Willow Bioscience.