How Is Nicotinamide Riboside (NR) Different Than Other NAD+ Nicotinamide Riboside (NR)… Precursors?
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Investor Presentation Rob Fried Chief Executive Officer Kevin Farr Chief Financial Officer Nasdaq: CDXC | May 2021 1 WHO WE ARE We are a global bioscience company dedicated to healthy aging. The ChromaDex team, which includes world-renowned scientists, is pioneering research on nicotinamide adenine dinucleotide (NAD+), levels of which decline with age. ChromaDex is the innovator behind NAD+ precursor nicotinamide riboside (NR), commercialized as the flagship ingredient Niagen®. Nicotinamide riboside and other NAD+ precursors are protected by ChromaDex’s patent portfolio. ChromaDex delivers Niagen® as the sole active ingredient in its consumer product Tru Niagen® available at www.truniagen.com and through partnerships with global retailers and distributors. This presentation and other written or oral statements made from time to time by representatives of ChromaDex contain “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934. Forward-looking statements reflect the current view about future events. Statements that are not historical in nature, such as 2021 financial outlook, and which may be identified by the use of words like “expects,” “assumes,” “projects,” “anticipates,” “estimates,” “we believe,” “could be,” "future" or the negative of these terms and other words of similar meaning, are forward-looking statements. Such statements include, but are not limited to, statements contained in this presentation relating to our expected sales, cash flows and financial performance, business, business strategy, expansion, growth, products and services we may offer in the future and the timing of their development, sales and marketing strategy and capital outlook, and the timing and results of pre-clinical and clinical trials. Forward-looking statements are based on management’s current expectations and assumptions regarding our business, the economy and other future conditions and are subject to inherent risks, uncertainties and changes of circumstances that are difficult to predict and may cause actual results to differ materially from those contemplated or expressed. We caution you therefore against relying on any of these forward- looking statements. These risks and uncertainties include those risk factors discussed in Part I, “Item 1A. Risk Factors” of our Annual Report on Form 10-K for the year ended December 31, 2020, filed with the Securities Exchange Commission (the “Commission”), and in our other periodic filings with the Commission. Any forward-looking statements are qualified in their entirety by reference to the factors discussed in these filings with the Commission. Should one or more of these risks or uncertainties materialize, or should the underlying assumptions prove incorrect, actual results may differ significantly from those SAFE HARBOR anticipated, believed, estimated, expected, intended or planned. Important factors that could cause actual results to differ materially from those in the forward looking statements include: the effect of the COVID-19 pandemic on our business, results of operations, financial condition and cash flows; a decline in general STATEMENT economic conditions nationally and internationally; decreased demand for our products and services; market acceptance of our products; the ability to protect our intellectual property rights; impact of any litigation or infringement actions brought against us; competition from other providers and products; risks in product development; inability to raise capital to fund continuing operations; changes in government regulation; and the ability to complete customer transactions and capital raising transactions. Factors or events that could cause our actual results to differ may emerge from time to time, and it is not possible for us to predict all of them. We cannot guarantee future results, levels of activity, performance or achievements. Except as required by applicable law, including the securities laws of the United States, we do not intend to update any of the forward-looking statements to conform these statements to actual results. About Non-GAAP Financial Measures ChromaDex’s non-GAAP financial measures exclude interest, income tax, depreciation, amortization, non-cash share-based compensation costs, severance and restructuring expense, bad debt expense related to Elysium Health and total legal expense for adjusted EBITDA excluding total legal expense. ChromaDex used these non-GAAP measures when evaluating its financial results as well as for internal resource management, planning and forecasting purposes. These non-GAAP measures should not be viewed in isolation from or as a substitute for ChromaDex’s financial results in accordance with GAAP. Reconciliation of GAAP to non-GAAP measures are attached to this presentation. FDA Disclaimer Statements made in this presentation have not been evaluated by the Food and Drug Administration. ChromaDex products are not intended to diagnose, treat, cure, or prevent any disease. The statements in this presentation are for investor relations and educational purposes only and not intended for consumers or vendors. SAFE HARBOR STATEMENT 3 ChromaDex Investment Highlights 1 PROVEN & PROPRIETARY NAD+ 3 STEADY E-COMMERCE GROWTH BOOSTING SUPPLEMENT AND EXPANDING GLOBAL • Total 2020 net sales of $59 million with $47 DISTRIBUTION FOOTPRINT million of Tru Niagen® net sales • E-commerce represents ~60% of the business • Tru Niagen® is the most efficient way to today, including North America, Europe, and safely elevate NAD+ Asia • Safety profile backed by 11 clinical trials and • Expanded to UK and Australia in 2020 global regulatory approvals • Launching in Walmart U.S. in 2021 • Strong IP protection with 20+ owned or • Strong blue-chip partners include A.S. Watson, licensed patents Nestlé Health Science, W.R. Grace, and two new partners in 2021 in H&H Group and Ro 2 SIGNIFICANT OPPORTUNITY 4 STRONG MOMENTUM AND DRIVEN BY TRENDS IN HEALTH & FINANCIAL DISCIPLINE WELLNESS • Revenue CAGR of 44% and gross margin • Global anti-aging market of ~$410 billion with increase from 48% to 60%+ since strategic dietary supplements growing 6%(1) pivot to focus on consumer product, Tru • Tru Niagen® gaining share in healthy aging Niagen®(2) and fitness categories; potential to expand to • Approaching cash flow break-even, as larger addressable markets measured by Adjusted EBITDA excluding • Exploring adjacent categories for Niagen® total legal expense(3) such as pet and infant nutrition • Investing in brand building and R&D in 2021 given rapid growth in NAD+ market (1) ChromaDex estimates. See slide 23 for details (2) Period from Q1 2017 to Q1 2021. Quarterly sales. (3) Non-GAAP metric. See slide 37 for details. 4 The Science The information contained in this documents is confidential, privileged and only for the information of the intended recipient and may not be used, published or redistributed without the prior written consent (2019) NAD+ declines by ~50% between the age of 40 and 60 6 What is NAD+ and Why is it Essential? Nicotinamide Adenine Dinucleotide (NAD+)… ATP • Is the mission critical co-enzyme in NAD+ cellular metabolism that is constantly being consumed and created by Food cells • Plays a vital role in: ADP + P • Cellular defense and repair CO2 NADH i • Energy production and the optimal function of our cells’ powerhouses (the mitochondria) 7 Basic Physiological Functions are NAD+ Dependent INTRINSIC CAPACITY DOMAIN Based on World Health Organization’s definition COGNITION LOCOMOTION VITALITY PSYCHOLOGICAL SENSORY Memory Muscle strength Energy metabolism Mood Vision Intelligence Balance Hormonal function Emotional vitality Hearing Problem-solving Gait Cardio-respiratory function 8 NR Clinical Trial Pipeline Snapshot* COGNITION LOCOMOTION VITALITY PSYCHOLOGICAL SENSORY # of Active Studies 6 6 13 0 4 # of Studies Completed 1 3 8 0 0 * Source: Based on Niagen® NR trials registered on clinicaltrials.gov and/or ChromaDex Material Transfer Agreements. Used ChromaDex classification into intrinsic capacity domains. As of May 10, 2021. Chart does not include pharmacokinetic studies. 9 NAD+ Declines with Age, Physiological Stress & Disease AGING NAD Muscle 30-85% NAD+ OVERNUTRITION Liver 40-90% Muscle 66-100% Adipose 55-75% Liver 25-100% Brain 35-90% Adipose 15-20% Pancreas 80-85% Blood Plasma 46% Spleen 35-40% Heart 30-70% NAD Kidney 15-98% Lung 20-25% AXONAL DEGENERATION Cerebrospinal fluid 86% Skin 40-50% Nerve 30% Blood plasma 15-92% Brain 53% Testes 100% Decreases in tissue NAD levels by tissue type and condition (as a % of baseline) Observed in human tissue (otherwise, based on rodents). Not intervention studies but correlated NAD levels in tissues with age. Based on Yoshino et al. (2018) Cell Metabolism 10 “With careful scientific evaluation, NAD+ replenishment strategies might serve as a promising multifunctional approach to improve the quality of life for an increasingly aged population.” NAD+ in Aging: Molecular Mechanisms and Translational Implications Fang EF et al. Trends Mol Med. 2017;23(10):899-916 Verdin E. Science 2015 Dec 4;350(6265):1208-13. 11 How is Nicotinamide Riboside (NR) Different than Other NAD+ Nicotinamide Riboside (NR)… Precursors? • Novel form of Vitamin B3 • Specific pathway to convert NR into NAD+ (NRK pathway) • More efficient NAD+ precursor than Tryptophan and Nicotinic Acid • NRK genes are activated under conditions of physiologic stress • Therefore, NR is the cell’s preferred Vitamin B3