Press release

Avivagen Signs Memorandum of Understanding with Distribution Agent in Asia-Pacific

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Avivagen Inc. (TSXV:VIV) (“Avivagen”) has entered into a memorandum of understanding with INPHILCO, Inc. setting out the terms under which the parties propose that INPHILCO will become a new, key distribution partner for OxC-betaTM Livestock in the rapidly growing Philippines market. The new agreement will see INPHILCO sell Avivagen’s OxC-beta™ Livestock non-antibiotic feed additive for swine and poultry to large integrated feed producers as a part of INPHILCO’S premix offerings and also as a standalone product and to commercial farms across the country. This memorandum of understanding is a step toward negotiating a binding definitive agreement between Avivagen and INPHILCO, which the parties expect to negotiate and sign within the next sixty days.

“Avivagen has made exceptional inroads in the Philippines in 2019, and we are very excited to work with INPHILCO to bring OxC-betaTM Livestock to an even greater proportion of the rapidly growing marketplace in 2020 and beyond,” said Kym Anthony, Chief Executive Officer, Avivagen. “INPHILCO’S deep rooted relationships with both large integrated feed producers and commercial farms, along with its well-earned reputation for high quality feed premixes, provides an opportunity for OxC-betaTM Livestock use for both swine and poultry to grow in the Philippines over the coming years.”

Along with working on the definitive distribution agreement with INPHILCO, Avivagen is also working to finalize rights to sell OxC-betaTM Livestock directly to Universal Robina Corporation, one of the Philippines’ largest integrated livestock producers and branded consumer food and beverage producer based in Quezon City. Universal Robina’s Agro-Industrial and Commodity Food Groups (URC AIG) is a leading producer of pork and poultry in the Philippines. URC AIG is currently testing OxC-betaTM Livestock in its integrated-feed for use in its internal swine production operations.

Avivagen will also continue to work closely with established Philippines distribution partner UNAHCO to include OxC-betaTM Livestock in locally-produced premixes for both swine and poultry. UNAHCO has been a sizable distributor of OxC-betaTM Livestock in the Philippines and has been an important part of establishing the viability of the non-antibiotic feed additive in the country. UNAHCO will continue to use OxC-betaTM Livestock in its feed products, along with selling in premix form to larger customers across the Philippines.

“UNAHCO, INPHILCO and Universal Robina represent three of the most established and important players in the Philippines feed production and sales ecosystem. When signed, these important new agreements with Inphilco and Universal Robina will help OxC-betaTM Livestock reach an even greater segment of the Philippine feed market,” adds Anthony.

Avivagen expects growth within the Asia-Pacific market to accelerate in 2020 and beyond as new applications of OxC-betaTM are being utilized by a growing number of local partners, and as it pursues additional regulatory approvals in new jurisdictions. Avivagen recently secured approval for OxC-betaTM Livestock for specific applications in Taiwan, Mexico, Malaysia and the United States.

OxC-beta™ Livestock has the potential to eliminate the use of antibiotics as growth promoters in livestock feed, a problem requiring an urgent solution and which represents a multi hundred million dollar market opportunity worldwide. Once a definitive agreement is signed between INPHILCO and Avivagen, INPHILCO will be able to purchase OxC-betaTM directly from Avivagen, and will hold the exclusive rights to sell the product to large integrated feed producers as an ingredient in its premixes and in its standalone form.

The Philippines is a growing and important feed market, with an estimated annual feed production of 19 million metric tons for 2019, a substantial increase from 11.75 million metric tons in 2016i. Swine and broiler poultry are the most important commercial livestock species in the country, for which the Philippines produces roughly the same amount of both porkii and broiler poultryiii as Canada.

About INPHILCO

Incorporated in 1962, INPHILCO is one of the oldest local Vet companies in the Philippines, covering poultry, swine, aquaculture, pet and feed mill requirements for animal nutrition, animal health and raw materials for compound feeds. In addition to employing sales and technical people covering the entire Philippines, INPHILCO has several warehouses nationwide to provide technical services and to cater to the needs of its customers, and imports and distributes quality products from all over the world such as The Netherlands, USA, India, South America, China, Denmark, among others.

About Avivagen

Avivagen is a life sciences corporation focused on developing and commercializing products for livestock, companion animal and human applications that, by safely supporting immune function, promote general health and performance. It is a public corporation traded on the TSX Venture Exchange under the symbol VIV and is headquartered in Ottawa, Canada, based in partnership facilities of the National Research Council of Canada and Charlottetown, Prince Edward Island. For more information, visit www.avivagen.com. The contents of the website are expressly not incorporated by reference in this press release.

About OxC-beta™ Technology and OxC-beta™ Livestock

Avivagen’s OxC-beta™ technology is derived from Avivagen discoveries about carotenoids, compounds that give certain fruits and vegetables their bright colours, and is a non-antibiotic means of maintaining optimal health and growth. OxC-beta™ Livestock is a proprietary product shown to be effective and economic as an alternative to the antibiotics commonly added to livestock feeds. OxC-beta™ Livestock is currently available for sale in the U.S., Philippines, Taiwan, Thailand, New Zealand, Mexico, Australia and Malaysia.

Avivagen’s OxC-beta™ Livestock product is safe, effective and could fulfill the global mandate to remove all in-feed antibiotics as growth promoters. Numerous international livestock trials with poultry and swine using OxC-beta™ Livestock have proven that the product performs as well as, and, sometimes, in some aspects, better than in-feed antibiotics.

About UNAHCO

UNAHCO is the wholly-owned feed and veterinary subsidiary of Unilab Inc., the biggest pharmaceutical company in the Philippines. UNAHCO provides a broad range of animal healthcare and nutrition products and programs to meet the requirements of both commercial and individual farmers in the Philippines as well as abroad. It is a leading producer of pig and poultry feed and has a distribution network that serves more than 3,000 outlets, supported by more than 150 field personnel.

Forward Looking Statements

This news release includes certain forward-looking statements that are based upon the current expectations of management. Forward-looking statements involve risks and uncertainties associated with the business of Avivagen Inc. and the environment in which the business operates. Any statements contained herein that are not statements of historical facts may be deemed to be forward-looking, including those identified by the expressions “aim”, “anticipate”, “appear”, “believe”, “consider”, “could”, “estimate”, “expect”, “if”, “intend”, “goal”, “hope”, “likely”, “may”, “plan”, “possibly”, “potentially”, “pursue”, “seem”, “should”, “whether”, “will”, “would” and similar expressions. Statements set out in this news release relating to the expectation that Avivagen will enter into definitive and distribution agreements with either of INPHILCO or Universal Robina, the possibility that either of INPHILCO or Universal Robina will sell OxC-beta Livestock in the Philippines, expected growth of demand and sales of OxC-beta within the Philippines or the Asia-Pacific market in general, the possibility for deployment or launch of OxC-beta™ Livestock in new jurisdictions around the world or for it to replace antibiotics in livestock feeds as well as fill a critical need for health support in certain livestock applications where antibiotics are precluded, Avivagen’s intention to accelerate market access and the commercial uptake of its OxC-beta™ Livestock product and the size of market opportunities are all forward-looking statements. These forward-looking statements are subject to a number of risks and uncertainties that could cause actual results or events to differ materially from current expectations. For instance, the memorandum of understanding with INPHILCO is non-binding and the parties may not be able to agree on terms of a definitive binding agreement with INPHILCO or Universal Robina on the anticipated terms or at all, none of UNAHCO, INPHILCO or Universal Robina is under any obligation to purchase product from Avivagen or to increase its purchases and could cease or reduce its purchases at any time, inquiries from potential new customers may not result in orders for Avivagen’s products and field trials underway may not have anticipated outcomes, demand for Avivagen’s products in Philippines and the Asia-Pacific market in general may not continue to grow and could decline, Avivagen’s products may not gain market acceptance or regulatory approval in new jurisdictions or for new applications and may not be widely accepted as a replacement for antibiotics in livestock feeds, new market access may not occur in the timeline or manner expected by Avivagen and the market opportunities may not be as large as Avivagen anticipates due to many factors, many of which are outside of Avivagen’s control. Readers are referred to the risk factors associated with the business of Avivagen set out in Avivagen’s most recent management’s discussion and analysis of financial condition available at www.SEDAR.com. Except as required by law, Avivagen assumes no obligation to update the forward-looking statements, or to update the reasons why actual results could differ from those reflected in the forward-looking statements.

Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

Copyright © 2019 Avivagen Inc. OxC-beta™ is a trademark of Avivagen Inc.


i 2019 Alltech Global Feed Survey

https://www.alltech.com/feed-survey?utm_campaign=Global%20Feed%20Survey%202019&utm_medium=email&_hsenc=p2ANqtz–AGoETF0zZ1WDoDg0uPrY_0qZrB_xROyGrnogeoEapd6HLPmuxvl-yTAgUTQhhbQMYlyNbHRVbA1iaSrj9T4cveN4kNA&_hsmi=69399865&utm_content=69399865&utm_source=hs_email&hsCtaTracking=d5d0aec5-0ce9-49e1-bbc9-7bd92473609c%7C89cb3f93-de07-4510-957f-6903ca86272c

ii See this link for Canadian swine production, https://www.statista.com/statistics/273232/net-pork-production-worldwide-by-country/

iii Canada produced 1.2 million metric tonnes of broiler meat in 2017: see reference https://www.statista.com/statistics/474831/broiler-meat-production-canada/