Update Report

Healthcare/Animal
Health June 25, 2020

December 2019 will continue in his role as the CFO and a member of
ZOMEDICA PHARMACEUTICALS CORP. the board of directors.

Successfully Raised $24MM in Capital since Q1

(NYSE AMERICAN: ZOM) Zomedica ended the first quarter with cash on hand of $1.5MM. Since
then the company has raised $24MM in gross proceeds – on May
29th, the Company raised $20MM by issuing 133.3MM of shares at
TARGET PRICE: USD $1.85 $0.15/share along with warrants to purchase 133.3MM in common
shares at $0.15/share. In April, the company raised $4MM by issuing
Based in Ann Arbor, MI, Zomedica is a near commercialization 33.3MM of shares at $0.12 per share and warrants to purchase
company developing diagnostic solutions for the veterinary healthcare 16.67MM of shares. The Company also received a loan of $0.5MM
market, specifically for companion animals (dogs, cats, and horses). under the SBA’s Paycheck protection program in April. As of June 18,
The company’s business model relies on developing veterinary 2020, the Company has received gross proceeds of 2,233,563 from the
applications of novel diagnostics that individually target large markets exercise of Series B and C warrants.
north of $50-100MM with considerably lower regulatory, R&D and ‘go
Stock Details (06/22/2020)
to market’ risk than the human market. The company’s solutions allow
veterinarians the opportunity to reduce time to care and grow
revenue while better serving the animals in their care. Revenues are
expected to begin in 2021 and could rise to nearly $60 MM by 2023. NYSE American: ZOM
Healthcare /
Sector / Industry
INVESTMENT UPDATES Biopharmaceuticals
Price Target USD $1.85
TRUFORMA™ Commercialization on Track, Apart Recent Share Price USD $0.22
from COVID Delays Basic Shares o/s (mm) 310.4
Zomedica has completed the verification of TRUFORMA platform, its Market Cap (in USD $59
point-of-care diagnostic biosensor and the first two assays (for both $mm)
canine and feline) of the total of five assays initially planned for use 52-week High/Low USD $0.50 / $0.11
with the TRUFORMA™ platform. This is a critical milestone on the path Average Volume (mm) 35,818,837
to commercial scale manufacturing. Verification confirms the
achievement of instrument design specifications, which follows FDA Key Financials ($ USD mm unless specified)
Medical Device guidelines. The last step before commercialization –
validation (which requires access to university labs) – has been KEY FINANCIALS 2019A 2020E 2021E 2022E
delayed because of COVID19, which in turn is likely to delay Revenues 0.0 0.0 7.5 20.3
commercialization of TRUFORMA till the end of the year. As a result, it
EBITDA (19.0) (13.9) (10.1) (3.6)
is now expected that revenues from TRUFORMA will not commence
before 2021. EPS ($) (0.19) (0.05) (0.03) (0.02)

Strategic Shift, Emphasis on Point-of-Care Diagnostic

ZOM Share Price in USD
Portfolio
The Company has decided to focus its capital and resources on the
development and commercialization of its diagnostic platform - in
particular, the TRUFORMA biosensor platform. As a consequence, the
company is seeking partners for further development of its
therapeutic portfolio. The company has four therapeutic pipeline
candidates. In addition, the company is also seeking partners for its
reference lab based diagnostic platform for Canine cancer. This
refocused portfolio approach will allow for the preservation of capital
and the onboarding of a point-of-care focused sales team.

New Interim CEO to Lead TRUFORMA Launch

ZOM appointed Robert Cohen as the Interim CEO on June 16. Mr.
Cohen brings 15 years of executive leadership and operations
experience spanning the medical device, biotech and pharma
industries and a track record of successfully launching medical devices.
He has been appointed just ahead of the commercial launch of Source: Yahoo Finance
TRUFORMA. Mr Shameze Rampertab, who has been interim CEO since
Copyright © 2020 PCG Research

PA
 Update Report
Healthcare/Animal
Health June 25, 2020

SUMMARY TABLE

SHARE DATA BALANCE SHEET DATA (1Q 2020) KEY PERSONNEL

Total cash Robert Cohen
Recent price (USD): $0.22 1.5mn Interim CEO
(USD):
Total debt Shameze Rampertab, CPA, CA
Price target (USD): $1.85 0.0mn CFO
(USD):
52-week range $0.11 – President,
Equity (USD): 2.0mn Stephanie Morley, DVM
(USD): 0.50 COO
Chief Bruk Herbst
Average daily
35,818,837 Commercial
volume:* Officer
Market cap (USD): $59mn
High /
Risk profile:
Speculative
Source: Yahoo Finance, Company Financials, priced as of 6/22/2020

Copyright © 2020 PCG Research

PA
 Update Report
Healthcare/Animal
Health June 25, 2020

FINANCIAL SUMMARY
Figure 1. Income Statement
FIGURES IN $MN UNLESS SPECIFIED FY18A FY19A FY20E FY21E FY22E FY23E
Revenue 0 0 0 7,450 20,250 60,750
YoY growth NM NM NM 171.8% 200.0%
Cost of sales 0 0 0 3,725 10,125 27,338
Gross Profit 0 0 0 3,725 10,125 33,413
Margin NM NM NM 50.0% 50.0% 55.0%
Operating expenses 16,579 19,784 14,184 14,184 14,184 22,500
EBIT (16,579) (19,784) (14,184) (10,459) (4,059) 10,913
Margin NM NM NM (140.4%) (20.0%) 18.0%
EBITDA (16,373) (18,997) (13,872) (10,090) (3,642) 11,385
Margin NM NM NM (135.4%) (18.0%) 18.7%
Other income/ (expense) (69) 0 19 (652) (1,803) (5,448)
Profit before tax (16,648) (19,784) (14,166) (11,111) (5,863) 5,464
Tax 0 0 0 0 0 0
Net income (16,648) (19,784) (14,166) (11,111) (5,863) 5,464
Margin NM NM NM (149.1%) (29.0%) 9.0%
EPS ($ per share) (0.18) (0.19) (0.05) (0.03) (0.02) 0.01
Source: Zomedica

Figure 2. Balance Sheet

FIGURES IN $MN UNLESS SPECIFIED FY18A FY19A FY20E FY21E FY22E FY23E
Cash 1,940 511 11,768 5,288 3,549 5,361
Other assets 4,093 3,672 3,762 5,488 8,269 16,608
Total assets 6,034 4,183 15,530 10,776 11,818 21,969
Current liabilities 2,377 2,088 2,000 2,745 4,025 8,075
Other liabilities 0 0 0 0 0 0
Shareholders’ equity 3,657 2,095 13,530 8,031 7,793 13,894
Total liab and shareholder equity 6,034 4,183 15,530 10,776 11,818 21,969

Source: Zomedica

Figure 3. Cash Flow Statement

FIGURES IN $MN UNLESS FY18A FY19A FY20E FY21E FY22E FY23E
SPECIFIED
Cash from operating activities (11,148) (15,634) (13,442) (10,980) (6,209) 2,412
Cash from investing activities (619) (687) (300) (500) (530) (600)
Cash from financing activities 10,259 14,891 25,000 5,000 5,000 0
Net inc/(dec) in cash (1,508) (1,430) 11,258 (6,480) (1,739) 1,812
Cash at beginning of the year 3,448 1,940 511 11,768 5,288 3,549
Cash at the end of the year 1,940 511 11,768 5,288 3,549 5,361

Source: Zomedica

Copyright © 2020 PCG Research

PA
 Update Report
Healthcare/Animal
Health June 25, 2020

ABOUT ZOMEDICA
Based in Ann Arbor, MI, Zomedica is a veterinary diagnostic company creating products for companion animals (canine,
feline and equine) by focusing on the unmet needs of clinical veterinarians. Zomedica’s product portfolio will include
novel diagnostics and innovative therapeutics that emphasize patient health and practice health. Zomedica is comprised
of clinical veterinary professionals and scientists, as well as business professionals, with a mission of identifying and
solving unmet needs for veterinarians. The company’s management team includes executives with impressive senior-
level experience from a number of leading companies in the animal healthcare space, including IDEXX Laboratories and
full management bios are included at the conclusion of the report). To meet its objectives, Zomedica is developing a
pipeline of diagnostics, instruments, therapeutics, and drug delivery methods targeting the $10 billion companion
animal market.

Zomedica is currently focused on investigating strategies for North America and global commercialization of diagnostics
for the companion animal market. Zomedica is also positioned to make advancements on the corporate development
front in coming quarters. The company is currently listed on the NYSE American exchange.

UPDATES ON PRODUCT PORTFOLIO

Focus on In-Clinic Diagnostics. Prior to January of this year, the company was pursuing a two pronged approach to the
companion animal market – one focused on Diagnostics and another focused on Therapeutics. In addition, the
Diagnostic portfolio was focused on both In-clinic and reference lab based solutions.

In order to conserve capital and focus resources, the Company has decided to focus on the development and
commercialization of its diagnostic platform - in particular, the TRUFORMA biosensor platform. As a consequence, the
company is seeking partners for further development of its therapeutic portfolio. The company has 4 therapeutic
pipeline candidates. In addition, the company is also seeking partners for its reference lab based diagnostic platform for
Canine cancer. This refocused portfolio approach will allow for the preservation of capital and the onboarding of a
point-of-care focused sales team.

Figure 4. Strategic Shift to Point of Care Testing

Source: Company Materials

Copyright © 2020 PCG Research

PA
 Update Report
Healthcare/Animal
Health June 25, 2020

TRUFORMA™ Verification Completed – Validation Delayed by COVID-19. Zomedica has completed the verification of
four assays for use with its TRUFORMA point-of-care diagnostic platform. The verified assays include canine and feline
total T4 (“tT4”), and canine and feline TSH (thyroid stimulating hormone). Together this represents completion of the
first two assays for both canine and feline of the total of five assays initially planned for use with the TRUFORMA
platform. This is a critical milestone on the path to commercial scale manufacturing. Verification confirms the
achievement of instrument design specifications, which follows FDA Medical Device guidelines. The last step before
commercialization – validation (which requires access to university veterinary hospitals and labs) – has been delayed
because of COVID-19, which in turn is likely to delay commercialization of TRUFORMA till the end of the year. As a
result, it is now expected that revenues from TRUFORMA will not commence before 2021.

Under the Company’s agreement with its development partner Qorvo, the achievement of this milestone required the
Company to make a $3 million payment to Qorvo and on April 21 it was announced that the milestone was achieved,
and the payment was made.

Verification work is currently proceeding on the canine free T4 thyroid assay. The verification studies are also evaluating
two adrenal assays: canine cortisol and canine eACTH (endogenous adrenocorticotropic hormone). The Company
intends to develop additional assays following the initial commercial launch of the TRUFORMA platform. Upon
completion of verification testing for the first five thyroid assays, the Company intends to commence the validation of
each assay and to initiate a parallel pilot program focused on optimizing the customer experience. Assuming successful
completion of this verification and development work, Zomedica intends to commence commercialization of all five
initial assays in select strategic markets. As previously reported by the Company, COVID-19 has impacted the Company’s
expected timing for the completion of the development and the initiation of the commercialization of the TRUFORMA
platform and the five initial assays.

About TRUFORMA – A point of care biosensor platform being developed in strategic partnership with Qorvo, a $12.8B
market cap semiconductor company. This will be a table top instrument that uses disposable assay cartridges to test a
range of samples including whole blood, serum, and plasma. The product is expected to test for hypothyroidism in dogs,
one of the most common endocrine diseases, hyperthyroidism in cats, a significant cause of morbidity in older cats,
Cushing's disease in dogs, another common endocrine disorder and Addison’s disease in dogs. The product consists of
box and cartridges (razor/razorblade model) and will enable the insourcing of reference lab tests and provide immediate
analysis for veterinarians and their patients. The product is expected to be priced similar to existing reference lab tests.

Milestones: ZOM completed the verification of TRUFORMA and the first assay (tT4) in April 2020. No timeline has been
published on expected validation dates for TRUFORMA but commercialization looks like it could get pushed to 2021.

Canine Cancer Liquid Biopsy Platform – Seeking Partners for Further Development and Commercialization – As a
consequence of the Company’s focus on its in-clinic Diagnostic platform, the Company has paused development work
on its Reference Lab based Liquid Biopsy platform. However, it is exploring partnerships to continue development of
these drug candidates which could be a more capital efficient way to realize upside from this platform, which requires a
different sales strategy vs the In clinic focused approach. In early 2020, ZOM successfully completed the development
and manufacturing milestones for the liquid biopsy platform.

About the ‘Liquid Biopsy’ Platform - This is a reference lab-based cancer diagnostic developed in partnership with Celsee
which was acquired by Bio-Rad in April. Canine cancer represents a large and urgent market opportunity for Zomedica,
as cancer is the leading cause of death for dogs over the age of ten. Indeed, according to the Veterinarian Cancer
Society, 50% of dogs over the age of ten will develop cancer, and 1 out of 4 dogs will develop cancer at some point in
their life. Most current testing available to dog owners is difficult, and it can cost pet owners as much as $2,000 for an
initial diagnosis, with a pathway to diagnosis that can vary depending on the cancer’s presentation, the type of cancer,
and ongoing test results. Through a research collaboration with Celsee Diagnostics, Inc., Zomedica is adapting Celsee’s
liquid biopsy technology used for human cancer detection for use in veterinary diagnostics that have the potential to be
faster, non-invasive, and able to identify cancer earlier, improving the chance that pet owners can choose the best
treatment options. Zomedica’s solution is a blood test with the potential to detect CTCs that have shed from a primary

Copyright © 2020 PCG Research

PA
 Update Report
Healthcare/Animal
Health June 25, 2020

tumor into nearby circulating blood. The CTC detection test could indicate a cancer diagnosis without the need for
invasive tissue biopsy and expensive imaging.

Pharmaceutical Pipeline – Development Work Paused, Offers Optionality

As a consequence of the Company’s focus on its In clinic Diagnostic platform, the Company has paused development
work on its Pharmaceutical pipeline. However, it is exploring partnerships to continue development of these drug
candidates which could be a more capital efficient way to realize upside from this side of the business.

To recall, the company had already opened Investigational New Animal Drug applications (INADs) with the FDA-CVM for
four new therapeutics. Zomedica’s drug development pipeline includes ZM-007 and ZM-012, both metronidazole
formulations for canine antidiarrheal therapeutics, as well as ZM-006, a methimazole transdermal gel for
hyperthyroidism in cats, and ZM-011, a transdermal gel of fluoxetine (Prozac®) commonly prescribed to treat behavioral
disorders in cats, such as inappropriate urination. Management believes that the drugs it is targeting are in the top 10
off-label drugs prescribed by veterinarians in the United States.

While “blockbuster” drugs for companion animals, which are estimated at $50-100mn in annual sales, offer smaller
potential revenues than their human counterparts, they also offer less risk, faster time to market, and the potential for
exclusivity upon approval. The average human pharmaceutical can take more than ten years to develop due to
discovery, preclinical studies, clinical trials, and FDA review. The comparable process for animal drugs derived from
human pharmaceuticals is a 3 to 6-year process including discovery, pilot studies, and 1 to 2-year FDA-CVM phased
review process.

FINANCIALS AND OUTLOOK

Recent Results
Zomedica released 1Q 2020 results on May 11. As expected for a development stage company, Zomedica did not
report revenues.

In its results announcement, Zomedica reported a Q1’20 loss of $2.5MM, compared to a loss of $11.7MM in Q1’19.
Research and development expense for the three months ended March 31, 2020 was $0.6MM compared to $7.5MM for
the three months ended March 31, 2019. The decrease was primarily due to a reduction in milestone payments and
licensing fees of $5.9MM, and contracted expenditures of $0.9MM. The reduction in milestone payments resulted
primarily from the non-recurrence of the payment in the 2019 period of an aggregate of $5,000,000 in milestone
payments related to TRUFORMA to Qorvo Biotechnologies, LLC. G&A expenses reduced by $2MM year on year mainly
due to a reduction in stock compensation expense.

Raised $24MM since the end of the quarter. Zomedica ended the quarter with cash on hand of $1.5MM. Since then
the company has raised $24M in gross proceeds – recently, the Company raised $20MM by issuing 133.3MM of shares
at $0.15/share along with warrants to purchase 133.3MM in common shares at $0.15/share. The company has raised
$4MM in April by issuing 33.3MM of shares at $0.12 per share and warrants to purchase 16.67MM of shares. The
Company also received a loan of $0.5MM under the SBA’s Paycheck protection program in April. As of June 18, 2020,
the Company has received gross proceeds of 2,233,563 from the exercise of Series B and C warrants.. In total, ZOM has
raised more than $24MM in gross proceeds since the end of Q1 2020. Earlier in February, the company raised $2.5MM
by issuing 20.8MM shares at $0.12 per share. In Q1 2020, Zomedica raised $1MM from a lease repurchase.

Outlook
The company provides no formal financial outlook. However, in a corporate update on April 13, the Company stated
that as a consequence of the COVID19 Pandemic, the company will no longer be able to meet prior expectations of
completing validation of its TRUFORMA platform by the end of the second quarter of 2020. In addition, the company
expects R&D expenses to be lower in 2020 vs 2019. The company also expects G&A expenses to decrease in the
remainder of 2020.

Copyright © 2020 PCG Research

PA
 Update Report
Healthcare/Animal
Health June 25, 2020

RISK CONSIDERATIONS
Financial Liquidity
Zomedica ended the quarter with cash on hand of $1.5mn. Since then the company has raised $24MM in gross
proceeds – last week, the Company raised $20MM by issuing 133.3MM of shares at $0.15/share along with warrants to
purchase 133.3MM in common shares at $0.15/share. The company has raised $4MM in April by issuing 33.3MM of
shares at $0.12 per share and warrants to purchase 16.67MM of shares. The Company also received a loan of $0.5MM
under the SBA’s Paycheck protection program in April. As of June 18, 2020, the Company has received gross proceeds of
2,233,563 from the exercise of Series B and C warrants. In total, ZOM has raised more than $24MM in gross proceeds
since the end of Q1 2020. Earlier in February, the company raised $2.5MM by issuing 20.8MM shares at $0.12 per share.
In Q1 2020, Zomedica raised $1MM from a lease repurchase.

We expect the company to raise additional funds to advance its development and commercialization plans in coming
quarters. Although the cost and time to market is lower in the veterinary market than human therapeutics, Zomedica
will require significant new capital to accomplish its goals in coming years, until its business reaches a scale at which it
can be self-funding. There is risk to the extent that the company is unable to gain access to the new capital required to
drive development and growth, or that the capital is not available on attractive terms, causing excessive dilution.

Sales Execution
Zomedica is targeting large markets with a goal of becoming a growth company supplying diagnostics and FDA-CVM
drugs to veterinarians in the US. While the company has assembled an experienced team to identify and target urgent
and pervasive veterinary needs, there is nevertheless sales execution risk. If the company fails to grow as quickly as
expected, or fails to gain regulatory approval in the projected timeline, then it may be unable to meet the estimates in
this analysis, the company’s own sales goals, or achieve the long-term profitability and cash flow contemplated by
management, which could impact the valuation of the company.

Innovation/Technology Risk
The healthcare market is subject to change and innovation, and Zomedica is exposed to risk that new products and
diagnostics are introduced, which may require it to make additional investments in its products and services to remain
competitive, or that render its offerings obsolete.

Competition
The veterinary market is competitive and includes a number of large supply companies with established sales
distribution, financial resources, and purchasing power.

Regulation
Zomedica operates in a highly regulated industry and is regulated by the FDA-CVM and potentially by the USDA on
future products. While the cost and time to commercialize new therapeutic products for the veterinarian market are
less than the human market, there is, nevertheless, a notable regulatory burden that must be met to bring new
products to market. The company will be required to invest time and resources to develop new products, including, in
many cases, conducting studies to demonstrate safety and effectiveness. Moreover, a part of Zomedica’s strategy is to
translate drugs approved for humans to the companion animal market. This process involves research, studies, and
close consideration of dosage and mechanism of action, among other things. Zomedica will be seeking to identify
therapeutics in which it can qualify for exclusivity on the veterinarian market, which will require successful navigation of
the regulatory process. ZOM’s diagnostics do not require regulatory approval to commercialize, but will be subject to
FDA regulatory oversight once it is in the market.

Copyright © 2020 PCG Research

PA
 Update Report
Healthcare/Animal
Health June 25, 2020

ABOUT ZOMEDICA PHARMACEUTICALS CORP.

Zomedica is s a veterinary diagnostic company creating products for companion animals (canine, feline and equine) by
focusing on the unmet needs of clinical veterinarians. Zomedica’s product portfolio will include novel diagnostics and
innovative therapeutics that emphasize patient health and practice health. For more information, visit
www.ZOMEDICA.com.

ABOUT PCG RESEARCH

PCG Research offers independent, issuer-sponsored research that is based on objective, fact-based analysis,
written by experienced CFA analysts, and strategically distributed to the investment community utilizing
targeted distribution channels as well as social media and private distribution relationships.

PCG Research is an affiliate of PCG Advisory, Inc. PCG Advisory is a leading investor relations firm
dedicated to the delivery of top-tier strategic services that encompass investor relations, capital markets
navigation, and corporate communications for innovative and emerging companies from around the globe.
PCG Advisory has extensive experience with life science, fintech and blockchain technology companies.

PCG Research is also an affiliate of PCG Digital Enterprises, LLC. PCG Digital owns, partners with and/or
licenses innovative aggregation, distribution, and engagement platforms. PCG Digital reaches thousands of
individual, retail and institutional investors and stakeholders through its proprietary and extensive distribution
network as well as through the use of unique multimedia marketing and audience development techniques.
PCG Digital, via its subsidiary, PCG Productions, produces management interviews and highlight and
informational clips to further enhance and showcase our client companies. Videos are filmed at robust
production resources in PCG’s NYC office. For more information, go to www.pcgadvisory.com

DISCLOSURES

Important Disclosures
PCG Advisory, Inc. research reports, company profiles and other investor relations materials, publications or
presentations, including web content, are based on data obtained from sources we believe to be reliable but
are not guaranteed as to accuracy and are not purported to be complete. As such, the information should not
be construed as advice designed to meet the particular investment needs of any investor. Any opinions
expressed in PCG reports, company profiles, or other investor relations materials and presentations are
subject to change. Management of Zomedica has reviewed and provided input to this report prior to
publication. PCG may or may not utilize any of such input, at its sole discretion. PCG and its affiliates may buy
and sell shares of securities or options of the issuers mentioned in this report at any time.

The information contained herein is not intended to be used as the basis for investment decisions and should
not be construed as advice intended to meet the investment needs of any investor. The information contained
herein is not a representation or warranty and is not an offer or solicitation of an offer to buy or sell any
security. To the fullest extent of the law, PCG Advisory, Inc., our specialists, advisors, and partners will not be
liable to any person or entity for the quality, accuracy, completeness, reliability or timeliness of the information
provided, or for any direct, indirect, consequential, incidental, special or punitive damages that may arise out of
the use of information provided to any person or entity (including but not limited to lost profits, loss of
opportunities, trading losses and damages that may result from any inaccuracy or incompleteness of this
information).

Copyright © 2020 PCG Research

PA
 Update Report
Healthcare/Animal
Health June 25, 2020

Stock market investing is inherently risky. PCG is not responsible for any gains or losses that result from the
opinions expressed on this website, in its research reports, company profiles or in other investor relations
materials or presentations that it publishes electronically or in print. We strongly encourage all investors to
conduct their own research before making any investment decision. For more information on stock market
investing, visit the Securities and Exchange Commission ("SEC") at www.sec.gov.

Financial Interests
Zomedica Pharmaceuticals, Corp. (NYSE American: ZOM) is a client of PCG Advisory, Inc. ZOM has an
agreement in place to pay PCG a monthly cash fee of $7,500 for PCG investor awareness and investor
relations advisory services. Additionally, ZOM paid PCG $18,000 for an initiation report plus 3 quarterly
updates, as well as certain investor awareness service related to these reports. This report is the first of the 3
quarterly updates.

Investor awareness and investor relations services and programs are designed to help small-cap companies
communicate their investment characteristics. PCG investor awareness and advisory services include the
preparation of a research profile(s), multimedia marketing, and other awareness services.

Copyright © 2020 PCG Research

PA