Correspondance with management thread, page-3

After posting i took the questions and comments and passed them back to Richard
Hi Matthew,

Please see my responses below.

MATT it appears that ZLD's success is, at the present, solely relying on the results of the 2 clinical trials. Whilst we are quietly confident that the results will be positive, one can never be 100% sure. The worst thing that could happen is that the results are taken as non conclusive and where will ZLD be at that point? I see that you need to consider taking a multi-pronged strategy however I noticed that you carefully used the word "If successful". So it begs to ask the question, if we are not, what's next?

RICHARD Like any biotech company, there is a risk our clinical trials may fail. This is obviously something investors need to take into account when buying shares in a biotech.

In terms of our risk mitigation strategy, we have multiple options. First we’ve chosen sleep as one of the target indictions where there is already solid (but not yet conclusive) evidence that treatment with medicinal cannabis is beneficial. As such, we considered this to be relatively low handing fruit.

Second our preclinical programme is progressing nicely. If the data continues to be positive we’ll be looking to accelerate these studies into clinical trials. Note, we’ve already established a strong IP position in cancer, which has potential to unlock significant commercial value.

Third we’re evaluating alternative clinical trials, which would provide access to other indications with high commercial value.

MATT The worst thing that could happen is that the results are taken as non conclusive and where will ZLD be at that point?

RICHARD I’m not sure I agrees. The worst thing that could happen is we fail to show any clinical benefit after treatment with medicinal cannabis. For well designed studies, equivocal or weakly positive data can be very powerful as it can be used to inform and refine the design of any subsequent trial. Science is normally an iterative process. We remain optimistic the sleep trial will generate positive data but we won’t know until it’s completed.

MATT It is not real value until we can monetised the IP right? So id love to hear how we are thinking through thwse trategies...

RICHARD Yes, we have filed IP across various indications, which has the immediate benefit of blocking our competitors. These patents are currently working their way through the examination process, which takes some time before they are granted. Once approved we can then protect the areas we own.

The real value for the patents will be unlocked when we generate clinical data that supports them. A successful outcome to the clinical trials could create licensing opportunities even before the patents are granted. The key here is that you have to own something to create a commercial opportunity. Hence the reason that filing patents has been core to our commercialisation strategy.

Hopefully I've answered your questions.

Best regards

Richard