TETRA BIO-PHARMA INC. MANAGEMENT'S DISCUSSION ...

TETRA BIO-PHARMA INC.

MANAGEMENT’S DISCUSSION AND ANALYSIS

For the three and six months ended May 31, 2019

TETRA BIO-PHARMA INC. MANAGEMENT’S DISCUSSION & ANALYSIS For the six months ended May 31, 2019 and up to July 25, 2019

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Table of Contents

CAUTION REGARDING FORWARD-LOOKING STATEMENTS ........................................................................ 3

DESCRIPTION OF THE COMPANY AND BUSINESS OVERVIEW ..................................................................... 4

Description of the Company’s Business .................................................................................................... 4

Growth Strategy ........................................................................................................................................ 5

Recent Announcements ............................................................................................................................ 5

Significant Transactions ............................................................................................................................. 7

Panag Pharma Inc. acquisition .................................................................................................................. 7

Ongoing clinical trials and research and development ............................................................................. 9

Commercial products and product pipeline ............................................................................................ 12

OVERALL PERFORMANCE AND SELECT FINANCIAL INFORMATION .......................................................... 13

RESULTS OF OPERATIONS ........................................................................................................................... 15

FINANCIAL INSTRUMENTS AND RISK MANAGEMENT ............................................................................... 23

RISK FACTORS ............................................................................................................................................. 23

ADDITIONAL INFORMATION AND CONTINUOUS DISCLOSURE................................................................. 27

APPENDIX A: “Biopharmaceutical Segment” ............................................................................................. 27


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This Management’s Discussion and Analysis ("MD&A") for Tetra Bio-Pharma Inc. (the "Company" or "Tetra") should be read in conjunction with the unaudited condensed consolidated interim financial statements (“financial statements”) for the three and six months ended May 31, 2019 as well as the consolidated annual financial statements for the year ended November 30, 2018, and 2017 and the notes thereto.

The financial information in this MD&A is derived from the Company’s financial statements for the three and six months ended May 31, 2019 and up to July 25, 2019, prepared in accordance with IFRS (International Financial Reporting Standards). The effective date of this MD&A is July 25, 2019.

CAUTION REGARDING FORWARD-LOOKING STATEMENTS

Certain statements in this MD&A may constitute "forward-looking information" or "forward-looking statements" within the meaning of applicable securities laws (collectively, "forward-looking statements"), which are based upon the Company’s current internal expectations, estimates, projections, assumptions and beliefs. Forward-looking statements are identified by the use of terms and phrases such as "anticipate", "believe", "could", "estimate", "expect", "intend", "may", "plan", "predict", "project", "will", "would", and similar terms and phrases, including references to assumptions. Such information may involve, but is not limited to, comments with respect to strategies, expectations, planned operations or future actions.

These forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause actual results, performance or achievements or industry results to be materially different from any future results, performance or achievements or industry results expressed or implied by such forward-looking information or financial outlook. The factors which could cause results to differ from current expectations include, but are not limited to: Tetra may not be able to obtain debt or equity financing necessary to support the growth of the Company; the ability to source cannabinoids, import/export and research restrictions for cannabinoid-based pharmaceuticals may delay or prevent the development of Tetra's products in various geographical jurisdictions; Tetra's products may not gain regulatory approval on a timely basis, or at all; Tetra may not be able to protect its intellectual property; clinical development may not proceed as intended, or at all resulting in delayed or no sales; exchange rate fluctuations between the Canadian and U.S. Dollar could affect Tetra's performance; Tetra's results are dependent upon the general state of the economy; Tetra depends on key personnel, the loss of which could harm its business; Tetra may be unable to grow its business long term or to manage any growth; Tetra may fail to comply with existing regulations or become subject to more stringent regulations; Tetra is dependent upon its management information systems; Tetra's insurance may be insufficient to cover losses that may occur as a result of Tetra's operations; the market price of the Common Shares (as defined below) will fluctuate; there is a possibility of dilution of existing Shareholders; Tetra may suffer a cyber-security breach; applicable laws may change unfavourably; Tetra may cease to invest in its non-core assets; and public perception may change unfavourably. For additional information with respect to risks and uncertainties, readers should carefully review and consider the risk factors described under the section "Risk Factors" and elsewhere in this MD&A. The information contained in this MD&A identifies additional factors that could affect the operating results and performance of Tetra. Shareholders and prospective investors are urged to carefully consider those factors.


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Readers are cautioned that the preparation of financial statements in accordance with International Financial Reporting Standards ("IFRS") requires Tetra's management to make certain judgments and estimates that affect the reported amounts of assets, liabilities, revenues and expenses. The forward-looking statements contained herein are expressly qualified in their entirety by this cautionary statement. Forward-looking statements reflect management's current beliefs and are based on information currently available to Tetra.

The forward-looking statements are made as of the date of this MD&A (or in the case of information contained in a document incorporated by reference herein, as of the date of such document), and Tetra assumes no obligation to publicly update or revise such forward-looking information to reflect new information, subsequent or otherwise, except as may be required by applicable securities laws.

DESCRIPTION OF THE COMPANY AND BUSINESS OVERVIEW Description of the Company’s Business

Tetra Bio-Pharma is a diversified and multifaceted bio-pharmaceutical company with a clinical program aimed at bringing novel drugs and treatments to patients and their healthcare providers. Its primary focus is cannabinoid-based drug discovery and development. The Company has three operational wholly owned subsidiaries: Phyto Pain Pharma Inc., Panag Pharma Inc. (“Panag”) and Tetra Natural Health Inc.

Active subsidiaries Principal activities

PhytoPain Pharma Inc. Cannabinoid-based drug discovery and drug development

Panag Pharma Inc. Cannabinoid-based pain management and drug development

Tetra Natural Health Inc. Commercial sales of natural health products and wellness beverages

These subsidiaries operate in two business segments, which when combined, allow for the leveraging of research & development, regulatory, cross-selling and operational synergies. The two segments are: 1. Biopharmaceutical: Development of cannabinoid-based medicines in three areas: Ophthalmology

(treatment of eye diseases), Chronic pain and Oncology (treatment of tumours);

2. Natural Health: The identification, development and marketing of hemp or non-cannabinoid-based natural health products, or cannabinoid-based products authorized for sale over the counter (OTC) by Health Canada.


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Target Addressable Markets

The Company’s focus on chronic pain, ophthalmic conditions as well as oncology represents a market worldwide estimated at close to $30 billion, according to Medtrack 2018. See the chart below, for the breakdown of the total estimated market between ophthalmic, chronic pain and oncology.

Growth Strategy

The Company’s focus, in the short-term, is to maximize the value through its advancement of its PPP011 Phase III clinical trials, and its Hemp Energy Drinks through the initiation of new distribution agreements to increase sales in Canada and open up the US market, and the beta-caryophyllene topical pipeline through the initiation of distribution agreements to achieve sales in Canada, USA and Europe. The Company’s focus, in the mid to long-term, is to obtain DIN numbers for its PPP011 and PPP002, bring the PPP003 ophthalmic drug into clinical trials, and commercialize its portfolio of natural health products and developing a medical food therapy for the treatment of interstitial cystitis. Recent Announcements

Recent announcements for the Company during the three months ended May 31, 2019, and up to the date of this MD&A, include the following:

On March 4, 2019, the Company announced the completion of the first double-blind, randomized and placebo-controlled Phase II clinical trial of cannabis oil capsules. The trial evaluated the safety and efficacy of different doses and ratios of medical cannabis oil comprised of THC and CBD, for the treatment of uncontrolled chronic pain in cancer and non-cancer patients. As at the date of this MD&A, the Company is completing the analysis of the clinical data and expects to announce the study outcomes once the results are final. Based on these outcomes, the Company will also finalize the next phase of clinical development.

(1) Medtracks 2018(2) Painful dry eye, uveitis, corneal neuropathic(3) Advanced cancer, breakthrough, fibromyalgia and intersticial cystitis(4) CINV, glioblastoma, tumour reduction

Ophthalmic (2)

9.5

Chronic pain (3)

11.1

Oncology (4)

9.0


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On March 27, 2019, the Company announced it is ready to submit its PPP001 cannabinoid-derived drug as a herbal medicinal product to the European Medicines Agency. As at the date of this MD&A, the Company has partnered with a European expert responsible in discussing the drug’s application with the European authorities. On April 9, 2019, the Company announced it is ready to resume its Phase III clinical program in advanced cancer pain patients with the objective to assess Health-Related Quality of Life (HrQoL). On April 9, 2019, the Company also announced the acceleration of the SERENITY© study. The SERENITY© Study will use a vaporizer, a Health Canada approved Class 2 medical device as a delivery mechanism which is more acceptable to hospitals and palliative care centers. Tetra’s new drug formerly referred to as PPP001 will be investigated in the SERENITY© Study under the commercial trademark of CAUMZ. In preparation for commercialization, Tetra has decided to brand its investigational drug name for regulatory filing purposes. Since this announcement the Company has actively been qualifying and opening clinical trial sites across North America, covering multiple US states from North to East and West, and several provinces in Canada. The qualification process includes seeking ethics approval at each of the qualified clinical sites and ensuring sites have the capacities to enroll patients rapidly and efficiently. On April 11, 2019, the Company announced that it has entered into a collaboration agreement with Ovensa Inc. (“Ovensa”) to evaluate TRIOZANTM, a proprietary nanomedicine platform for targeted delivery of cannabinoids to brain tumor cells. As at the date of this MD&A the Company is in the process of finalizing a definative agreement. On April 29, 2019, the Company announced the signing of a Joint Venture Agreement with Altus Formulation Inc., under which the two companies will work together to develop a series of cannabinoid-receptor targeted therapeutics addressing multiple areas of high unmet need. As at the date of this MD&A Altus Formulation Inc. and Tetra have commenced working under this agreement. On May 1, 2019, the Company announced the closing of the Panag Pharma Inc. (“Panag”) acquisition. Refer to the significant acquisition section. On May 2, 2019, the Company announced that its pilot clinical study to evaluate the tolerability and potential efficacy of its PPP003 ophthalmic drug in the treatment of indolent corneal ulcers in companion animals has been authorized by the Veterinary Drugs Directorate (“VDD”), Health Canada. The VDD granted the Experimental Studies Certificate to the veterinary ophthalmologists that will be performing the clinical study for Tetra. As at the date of this MD&A, the clinical site has been chosen and is being prepared for the upcoming trial activities. On May 31, 2019, the Company presented key findings from its three Phase I and its Phase II cancer and non cancer investigational trials with cannabinoids, before the Food and Drug Administration’s (“FDA”) Scientific Data and Information about Products Containing Cannabis or Cannabis-Derived Compounds, Part 15 Public Hearing in Silver Spring, Maryland. Due to the competitive sensitivity of the information, Tetra will not be able to further comment on this issue and its exchanges with regulators. On June 17, 2019, the Company announced that it conducted a Type B meeting with the United States FDA for its noncontrolled cannabinoid drug product PPP003 slated for the treatment of painful dry eye. The


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purpose of the meeting was to obtain confirmation of the Phase II clinical study design and the quality and toxicology requirements for initiating this trial in patients in the USA. The FDA Type B meeting:

• Confirmed the proposed quality information requirements for initiating Phase II trial in patients; • Provided feedback on the GLP toxicology requirements to initiate Phase II trial; • Reviewed the proposed Phase II clinical study and agreed that it was acceptable to evaluate the

safety and efficacy of PPP003 Ophthalmic Solution for the treatment of the signs and symptom of painful dry eye; Provided guidance on acceptable primary and secondary endpoints.

On July 12, 2019, the Company announced it had closed its short form prospectus offering. A total of 26,833,332 units of the Company were issued at a price of $0.30 per unit, for aggregate gross proceeds of $8,050,000. Each unit consisted of one common share and one common share purchase warrant. Each warrant entitles the holder thereof to acquire one common share by paying an exercise price of $0.40 for a period of 36 months from the date of closing of the offering. The Company paid the agents cash fees of $495,113 as well as issued 1,650,078 warrants. Each agent warrant entitles the holder thereof to acquire one common share by paying an exercise price of $0.40 for a period of 24 months from the date of closing of the offering. Significant Transactions

Panag Pharma Inc. acquisition

On May 01, 2019, the Company announced that it completed the acquisition of Panag pursuant to a share purchase agreement dated January 30, 2019, between the Company and the shareholders of Panag. Following the closing of the acquisition, Panag became a wholly owned subsidiary of the Company. Pursuant to the Agreement, Tetra acquired 100% of the issued and outstanding common shares of Panag in consideration for, in aggregate, (i) $3,024,311 in cash and (ii) the issuance of 16,304,348 common shares of Tetra at a fair value price of $0.68 per common share, based on the closing trading price of Tetra’s shares on May 1, 2019. The Agreement also contemplates the payment by Tetra to the Vendors of an aggregate amount of up to $15,000,000 in cash in milestone payments upon the achievement of operational targets associated with marketing approvals and commercialization of both human and veterinary drug products by the U.S. Food and Drug Administration (“FDA”) and the European Medicines Agency (“EMA”). As at May 31, 2019, the Company had not met any of the milestones and as a result no milestone payments have been accrued. Management of the Company believes that the clinical trials and intellectual property acquired is at an early stage level and due to the nature of the assets and related milestones, there is a high degree of uncertainty that the milestones will be obtained. As a result, the milestones were not included in the purchase price and have been disclosed by the Company as contingent liabilities.


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The Company has early adopted the amendments to IFRS 3, effective December 1, 2018. The transaction does not constitute a business combination, as Panag does not meet the definition of a business using the concentration test introduced under amended IFRS 3, Business Combinations. As a result, the transaction is accounted for as an acquisition of assets with the equity consideration accounted for in accordance with IFRS 2, Share-based Payment, measured at fair value. The purchase price is allocated to the tangible assets and assumed liabilities recorded at their estimated fair values at the date of acquisition with any purchase price surplus allocated to identified intangible assets. The purchase price equation is as follows:

May 1, 2019 $ Cash 3,024,311 16,304,348 common shares with an estimated fair value of $0.68 per common share

11,086,957

Transaction costs 525,527 14,636,795 The consideration has been allocated as follows:

Cash 222,130 Accounts receivable 26,033 Prepaids 2,293 Intangibles 14,519,184 Accounts payable (132,845) 14,636,795

The determination of the allocation of the consideration to the net assets acquired are based upon management’s best estimates. As Tetra has issued shares and cash with a value in excess of the assets received, IFRS 2 and IAS 37 would indicate that the difference is recognized in operations as intangible assets. The amount of $14,519,184 is recognized as intangible assets, clinical trials and natural health product numbers, on the unaudited condensed interim consolidated statement of financial position. The acquisition of PANAG and its products at various stages of development, are a perfect fit for Tetra’s business model by providing a deeper pipeline of early stage products for development and regulatory filing to attract strategic commercial partners to distribute these products in Canada, the US and around the world. Below is a brief description of the acquired intellectual property. These products will be described in more detail in the following sections: Ongoing clinical trials and research and development and Commercial products and product pipeline.

• A cannabinoid formulation and a patent to treat various eye conditions such as Painful Dry Eye, Uveitis and other conditions in the ocular pain market (PPP003);

• Existing Topical prescription drug products;


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• Therapies for Interstitial Cystitis; • Health Canada approved, Natural Health products for treatment osteoarthritis, joint and muscle

pain, Cold sores and hemorrhoids (beta C family).

Ongoing clinical trials and research and development

The following timeline summarizes all clinical/regulatory works we are currently performing on all our product assets:


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Biopharmaceutical – Oncology Segment:

PPP001 & PPP011 (CaumzTM) - Serenity© and Reborn©: Target Intended Uses

As an adjunct to standard of palliative care, PPP001 and PPP011 aim to improve quality of life and help reduce pain of terminal adult cancer patients. In 2017 and 2018 Tetra performed several clinical trials to elucidate the safety, pharmacokinetic and pharmacodynamic effects of smoked and vaporized cannabis. Through its vast clinical and inhalation research data Tetra bridged PPP001 to PPP011 thereby allowing the Company to proceed with CaumzTM (PPP011) as a replacement for PPP001. This new generation product is composed of pure synthetic THC and CBD. This simple combination results in patients exposed to THC and CBD as well as other cannabinoids. Target population includes terminal cancer patients with a malignant cancer and uncontrolled pain.

Based on the impurities in PPP001, and potential for future similar impurities, the Company accelerated the development of CaumzTM and then proceeded to the re-initiation of the Phase II and III clinical trials using CaumzTM instead of PPP001. The Company intends to perform these trials in Canada and the USA to accelerate enrolment. Assuming a successful outcome, Tetra will seek conditional approval for the first target intended use and will subsequently begin submitting for coverage by provincial public insurers. With respect to PPP001, Tetra is currently in the submission process of a Marketing Authorization Application (MAA) application in Europe under the herbal medicines’ regulations of DIRECTIVE 2001/83/EC of the EUROPEAN PARLIAMENT AND OF THE COUNCIL relating to medicinal products (i.e., drug regulations) for human use. The type of impurities detected were well below the accepted standard in Europe and many other countries.

In parallel, the Company intends to:

• Launch a compassionate access program to allow the treatment of patients that are not eligible for the Phase III trial;

• Pursue the development of PPP011 as a treatment for patients suffering from fibromyalgia; Re-initiate Phase II trial in breakthrough pain comparing the safety and efficacy of PPP011 versus sublingual fentanyl;

• Target other conditions to expand the market size for PPP011.

For all conditions, CaumzTM will be administered using the Mighty Medic vaporizer. PPP002- OpioSpare©: Slow Release formulation of Dronabinol (co-development with IntelGenx)

This partnership will allow Tetra to market a slow release formulation, avoiding the traditional oral route of administration by which an absorbed drug will travel through the gastrointestinal tract into the liver and will then be metabolized by enzymes to such an extent that most of the active agent does not exit the liver and, therefore, will not reach the blood stream. In addition, the sustained release reduces the maximum concentration of THC in the blood, thereby reducing the adverse effects associated with high levels of THC in the blood stream.


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A proof-of-concept study in patients will be performed to minimize the risk associated with bringing this product to the market for opioid sparing indications. In addition, this latter study will confirm the safety benefits in patients and determine the group sizes for Phase III studies for opioid sparing conditions. PPP002 is at the stage of optimizing the commercial manufacturing process and preparation of the premarketing files. Biopharmaceutical – Ophthalmic Segment (Panag): PPP003: Ocular formulation of cannabinoids – HU 308 Panag has a formulation and a patent for cannabinoids in the treatment of ocular conditions and developed several formulations for the treatment of various eye conditions such as Painful Dry Eye and Uveitis. The Company is developing several other eye formulations for the ocular pain market. The project team has completed the non-clinical safety studies and submitted an Information Package to the FDA in a Type B meeting in June 2019. The purpose of this regulatory meeting was to discuss the clinical development program for PPP003 in humans. On June 17, 2019, the FDA accepted Panag´s development program in response to the Type B meeting. Launch of the Phase I and Phase II clinical studies in Uveitis and Painful Dry Eye is planned for early 2020. Biopharmaceutical – Chronic Pain Segment:

PPP004: Topical cream It's a cannabinoid-based topical, locally administered therapeutic for the treatment of General Neuropathic Pain ("GNP"). Under the current drug regulations, the clinical program to support this intended use involves two well-designed Phase III trials: • a double-blind, randomized, placebo-controlled clinical study to be initiated in late 2019 to demonstrate safety and efficacy in patients with GNP; and

• a double-blind, randomized, placebo-controlled clinical study in 2020 to demonstrate safety and efficacy in patients with GNP. This clinical program has been revised based on the projected changes to the Cannabis Act that came in effect October 2019 and further changes expected in October 2020. The Company will provide a market update once the final changes to regulations are adopted by the Canadian government.

PPP005: Cannabis oil capsules The Company received approval from Health Canada ("NOL") to perform a Phase I clinical trial in healthy volunteers to assess the safety and pharmacokinetics of the cannabis oil and a Phase II trial in chronic pain patients to assess the safety and efficacy. Both studies are now complete, and the Company is currently assessing the data. The development strategy will be modified based on its Joint Venture with Altus Formulations Inc.


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The first phase of the PPP005 (encapsulated cannabis oil) research program was completed. Tetra performed a Phase I clinical trial in healthy volunteers and a Phase II trial in non-cancer and cancer pain patients. This data is currently under scientific evaluation and management expects the program to resume in the near future. Interstitial Cystitis Product Candidate

Panag has also developed therapies, along with intellectual property, for the treatment of interstitial cystitis. The plan is to start commercializing some of these products as early as 2020. Commercial products and product pipeline

Natural Health Segment

The Company's natural health segment product candidates will be commercialized by its wholly owned subsidiary, Tetra Natural Health (TNH). TNH specializes in commercialization of hemp or non-cannabinoid-based products for over-the-counter ("OTC") and pharmacy self-care within Canada. The Company intends to market some of these products with Genacol Company Canada. Tetra Natural Health also aims to commercialize topical and oral Natural Health Products (NHPs) pipeline developed by Panag. Starting early 2019, Hemp Energy Drink (HED), the first of its kind and 100% natural, has been available in many stores across Western Canada. In the three months ending May 31, 2019, Tetra Natural Health (TNH) received an additional twenty containers (1.7 million cans) of HED enabling it to expand its market nationally to over 3,000 distribution outlets and to record sales of $ 1,320,213. TNH forecasts that the second quarter sales will double by end of fiscal 2019, providing its ability to timely obtain additional inventory from its European distribution partner.

PPP004: Topical cream

The PPP004 topical product line is being developed for commercialization by Tetra Natural Health.

PPP004 is a locally administered therapy for the treatment of General Neuropathic Pain ("GNP"). Under the current drug regulations, the clinical program to support this intended use involves the conduct of two well-designed Phase III trials:

1. A double-blind, randomized, placebo-controlled clinical study in late 2019 to demonstrate safety and efficacy in patients with GNP; and

2. A double-blind, randomized, placebo-controlled clinical study in 2020 to demonstrate safety and efficacy in patients with GNP.

This clinical program has been revised based on the projected changes to the Cannabis Act that came in effect in October 2019.


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Topical A (OTC) - AwayeTM

Awaye™ is a first in class topical cream used to provide relief in neuropathic pain, acute musculoskeletal ("MSK") strains, tendonitis as well as chronic MSK conditions, such as chronic low back pain, chronic plantar fasciitis and osteoarthritis of the knee or other joints. Awaye™ contains non-cannabinoid ingredients that interact with the endocannabinoid and TRPV1 system to provide relief from pain.

Panag is completing a fully funded Phase III clinical trial evaluating the safety and efficacy of Awaye™ for the treatment of pain caused by osteoarthritis of the knee. It should be noted that Awaye™ is approved by Health Canada for other conditions including the treatment of muscle and joint pain caused by arthritis.

Other Natural Health Products to be commercialized by Tetra Natural Health

Within Panag’s natural health product portfolio, the following products have already been approved by Health Canada and have received a Natural Product Number (“NPN”):

• Topical A, a cream for treating osteoarthritis, joint and muscle pain

• Beta C + Zinc, a gel for the treatment of cold sores

• Beta C + Benzocaine a cream to be used in treating hemorrhoids

These products will be available to consumers without a prescription in the natural product section of various retail outlets and on-line starting in late 2019.

Repurposing Product Candidates

Panag is also using its beta-caryophyllene1 know-how to repurpose multiple NHP and OTC health care products. It is currently repurposing two of the existing topical products which will benefit from the addition of ß-caryophyllene (a powerful terpene) and the Multiplexed Molecular Penetration Enhancer (“MMPE™”), a patented technology developed by partner Crescita™. The MMPE™ will provide increased permeability of active ingredients through the skin thereby providing an improved delivery to the therapeutic target including joints & bones and muscles. Filing of two repurposed (DIN) products with Health Canada is planned for the later part of its fiscal 2019, early 2020. Management is looking into the ability to launch the first two repurposed natural health products during the first half of its fiscal 2020.

OVERALL PERFORMANCE AND SELECT FINANCIAL INFORMATION

As at May 31, 2019, the Company had a working capital surplus of $2,326,740 (November 30, 2018 – $11,983,723), including $1,299,444 (November 30, 2018 - $13,585,673) in cash and current liabilities totaling $1,553,523 (November 30, 2018 - $2,543,734). The Company must secure additional financing to

1 Beta-caryophyllene also known as caryophyllene or (−)-β-caryophyllene, is a natural bicyclic sesquiterpene that is a constituent of many essential oils including that of Syzygium aromaticum (cloves), Cannabis sativa, rosemary, and hops.

https://pubchem.ncbi.nlm.nih.gov/compound/caryophyllene


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be able to fund its ongoing clinical trials. Management is evaluating various alternatives to secure the necessary financing so that the Company can continue as a going concern. Nevertheless, there is no assurance that these initiatives will be successful. Management believes that the Company has enough working capital to support operations and research for the next fiscal year.

The carrying amount of assets, liabilities and expenses presented in the financial statements and the classification used in the statement of financial position have not been adjusted as would be required if the going concern assumption was not appropriate. Those adjustments could be material.

The following discussion of the Company’s financial performance is based on the unaudited condensed consolidated interim financial statements for three and six months ended May 31, 2019.

Financial position as at May 31, 2019 November 30, 2018$ $

Cash 1,299,444 13,585,673 Accounts and sales tax receivable 1,689,563 759,389 Inventory 626,394 - Intangible assets 23,154,273 8,638,690 Accounts payable and accrued liabilities 1,553,523 2,543,734 Total equity 25,481,013 20,887,080

As at May 31, 2019, the Company had cash of $1,299,444 (November 30, 2018 - $13,585,673), accounts receivable of $1,689,563 (November 30, 2018 - $759,389), and total current assets of $3,880,263 (November 30, 2018 - $14,527,457).

Shareholders’ equity is comprised of share capital of $51,899,320 (November 30, 2018 - $34,841,667), warrants of $9,661,836 (November 30, 2018 - $15,332,398), contributed surplus of $3,638,907 (November 30, 2018 - $3,515,581), and a deficit of $39,719,050 (November 30, 2018 - $32,802,566) for a net surplus of $25,481,013 (November 30, 2018 - $20,887,080).

2019 2018 2019 2018$ $ $ $

Revenue 1,320,213 - 1,320,213 - Cost of sales 829,127 - 829,127 - Gross profit 491,086 - 491,086 -

ExpensesResearch and development 1,546,899 1,572,106 3,276,244 2,423,258 Stock based compensation 21,951 306,085 123,389 955,544 General and administrative expense 2,130,431 1,135,167 3,824,810 1,748,533 Other items 64,962 29,950 183,127 45,203 Net loss and total comprehensive loss (3,273,157) (3,043,308) (6,916,484) (5,172,538)

Six months ended May 31, Three months ended May 31,


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For the three and six months ended May 31, 2019, the Company reported a net loss of $3,273,157 (May 31, 2018 - $3,043,308) and $6,916,484 (May 31, 2018 - $5,172,538). As at May 31, 2019, 185,136,079 (November 30, 2018 – 162,831,631) common shares of the Company were issued and outstanding. During the six months ended May 31, 2019, a total of 6,000,000 common share purchase warrants were exercised for gross proceeds of $300,000. The warrants had an average exercise price of $0.05 and expired between February 16, 2019 and June 7, 2020. During the six months ended May 31, 2019, a total of 100 stock options were exercised for gross proceeds of $71. The stock options had an exercise price of $0.71. On July 12, 2019, the Company announced it had closed its short form prospectus offering. A total of 26,833,332 units of the Company were issued at a price of $0.30 per unit, for aggregate gross proceeds of $8,050,000. Fluctuation in operating results The Company anticipates that its quarterly and annual results of operations will be impacted for the foreseeable future by several factors including: the level of hemp energy drink sales to the Company’s distributors, the timing and launch of new products, the advancement of the company’s research and development including any milestones and other payments made pursuant to current and future arrangements. During the quarter ended May 31, 2019, the Company earned 100% (May 31, 2018 - 0%) of its product revenue from a single customer, Kombucha Baby Brewing Co. The Company earns revenue from the sale of its Hemp Energy Drinks to Kombucha pursuant to a distribution agreement. Quarterly and annual results of operations will be impacted for the foreseeable future by Kombucha’s demand for Hemp Energy Drink products due to Kombucha’s promotional strategies, demand for the product in the Western Canada market and how Kombucha chooses to manage its internal inventory.

RESULTS OF OPERATIONS For the three and six months ended May 31, 2019 compared to the three and six months ended May 31, 2018.

2019 2018 2019 2018$ $ $ $

Revenue 1,320,213 - 1,320,213 - Cost of sales 829,127 - 829,127 - Gross profit 491,086 - 491,086 -


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Revenue, which represent the Company’s sales to a distributor, were $1.3 million for the three and six months ended May 31, 2019 compared to $Nil for the three and six months ended May 31, 2018. In Q1 2019 the Company started stocking inventory of the Hemp Energy Drink and re-commenced sales in the second quarter of 2019. There were no products sold by the Company in the comparative periods.

Significant customer As at May 31, 2019, the Company’s largest customer represented 100% (November 30, 2018 - 0%) of accounts receivable. A decrease of $25,207 in Research and Development compared to the prior period (May 31, 2018 – $1,572,106) is the result of the Company’s prioritization of key projects such as the PPP011 - Serenity ©, Phase III trial. An increase of $852,986 for the six months ended May 31, 2019 compared to May 31, 2018 is a result of realignment of corporate strategy to focus on Caumz (PPP011), Ocular formulation of cannabinoids – HU 308 (PPP003), Topical Cream (PPP004). Costs incurred in the first six months of 2018 were required to enable Tetra to quickly refocus its priorities.

Significant variances in general and administrative expenses from the prior period include:

May 31, 2019 May 31, 2018 May 31, 2019 May 31, 2018$ $ $ $

Management fees 26,970 111,135 163,452 202,737 Payroll and benefits 1,027,006 247,789 1,463,680 430,332 Professional fees 194,342 430,117 709,670 626,375 Exchange and regulatory fees 59,706 135,029 92,976 175,560 Travel and promotion expense 705,275 172,073 909,978 252,319 Depreciation 1,800 1,800 3,600 3,600 Fees for termination of a contract - - 250,000 - General and administrative expense 115,332 37,224 231,454 57,610 Total 2,130,431 1,135,167 3,824,810 1,748,533

Three months ended Six months ended

1- A decrease of $84,165 and $39,285 in management fees for the three and six months ended May 31, 2019, respectively, compared to the prior periods (May 31, 2018 – $111,135 and $202,737 respectively) is a result of fewer consulting services used in three months ended May 31, 2019 compared to the three months ended May 31 2018. During the six months ended May 31, 2019, consultants that were used more heavily in Q1 2019 were added to Tetra’s payroll following in Q2 2019 which resulted in an increased payroll expense and a decreased management fee expense.

2- Payroll and benefits increased by $779,217 for the three months ended May 31, 2019, compared to the prior period (May 31, 2018 – $247,789). The primary reason for the increase in payroll fees during the three and six months ended May 31, 2019 compared to the same periods in 2018 is due to 1) In Q2 -2018, only 4 employees were on Tetra’s payroll. Compared to 20 employees in Q2


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2019, which provide services on the Company’s research and development projects and administration; 2) During the three months ended May 31, 2019, the Company incurred a severance payment of $350,000.

3- Professional fees decreased by $235,775 for the three ended May 31, 2019 and increased $83,295 for the six months ended May 31, 2019, respectively, compared to the prior periods (May 31, 2018 – $430,117 and $626,375 respectively). The decrease of $235,775 during the three months ended May 31, 2019, compared to May 31, 2018, is due to the fact that the Company had recently completed the Panag acquisition on May 1, 2019 and all costs associated with the Panag acquisition were capitalized to the Panag assets as the acquisition was accounted as an asset acquisition under IFRS. During the three months ended May 31, 2018, the Company completed a prospectus financing and incurred significant consulting fees to complete the financing including $142,000 paid to a consultant of the Company. During the three months ended May 31, 2018, the Company also purchased the remaining 20% non-controlling interest in PPP. During the six months ended May 31, 2019 compared to May 31, 2018, the Company engaged in more public relations activities as well as incurred more legal fees and general securities matters in relations to various corporate activities.

4- Expenses in travel and promotion for the three and six months ended May 31, 2019 increased by $533,202 and $657,659 respectively, compared to the prior periods (May 31, 2018 – $172,073 and $252,319). This increase in the three and six months ended May 31, 2019 is due to various non reoccurring significant promotional initiatives including research and development grants to various research partners including Ontario Lung Association, University of New Brunswick as well as various public relations and conference activities to promote Tetra and its progress in the drug development. In Q2-2019 in preparation for the July 2019 prospectus offering as well as the signing of multiple new partnership agreements, the Company increased travel and promotion.

5- General and administration fees increased by $78,108 and $173,844 for the three and six months ended May 31, 2019, respectively, compared to the prior periods (May 31, 2018 – $37,224 and $57,610 respectively). The increase is due to office costs relating to the increase of 16 new employees.


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SELECTED QUARTERLY INFORMATION

The following summarized financial data has been prepared in accordance with IFRS and should be read in conjunction with the Company’s annual and interim consolidated statements for those periods.

Quarter Ended Revenue

Net (Loss) Income

Basic and Diluted Earnings (Loss) per Common Share

$ $ $ 31/05/2019 28/02/2019

1,320,213 -

(3,273,157) (3,643,327)

(0.02) (0.02)

30/11/2018 112,820 (4,531,354) (0.03) 31/08/2018 - 1,851,898 0.01 31/05/2018 - (3,043,308) (0.02) 28/02/2018 - (2,128,780) (0.02) 30/11/2017 - (2,108,108) (0.01) 31/08/2017 - (1,487,514) (0.01)

OFF BALANCE SHEET TRANSACTIONS

The Company does not have any off-balance sheet arrangements other than as discussed in this MD&A in the commitments and contingencies section below. PROPOSED TRANSACTIONS

In the normal course of business, the Company evaluates potential asset acquisitions and, in some cases, makes proposals to acquire such assets. These proposals, which are subject to Board and sometimes regulatory and shareholder approvals, may involve future payments, and share issuances. These future obligations are usually contingent in nature and generally the Company is only required to incur the obligation if it wishes to continue with the transaction. LIQUIDITY AND CAPITAL RESOURCES

When managing capital, the Company’s objective is to ensure the entity continues as a going concern as well as to achieve optimal returns to shareholders and benefits for other stakeholders. Management adjusts the capital structure as necessary in order to support the acquisition of a medical cannabis production license. The Board does not establish quantitative return on capital criteria for management, but rather relies on the expertise of the Company's management team to sustain the future development of the business. The Company considers its capital to be equity attributable to equity holders, which is comprised of share capital, reserves and surplus which totalled $25,481,013 as at May 31, 2019 (November 30, 2018 – $20,887,080).

The Company currently has few operating revenues and relies primarily on equity financing. As at May 31, 2019, the Company had assets of $27,034,536 (November 30, 2018 - $23,430,814) and a working capital surplus of $2,326,740 (November 30, 2018 – $11,983,723).


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On July 12, 2019, the Company announced it had closed its short form prospectus offering. A total of 26,833,332 units of the Company were issued at a price of $0.30 per unit, for aggregate gross proceeds of $8,050,000.

Accordingly, as at the date of this MD&A, management believes that the cash balance is sufficient to meet its general working capital requirements and contractual obligations for the short-term, however, to complete the subsequent phases of its clinical trials, the Company will require additional long-term funding.

LITIGATION

The Company operates in an industry in which, from time to time, it may be named as a party to claims or involved in proceedings, including legal, regulatory and tax related, in the ordinary course of its business. While the outcome of these matters may not be estimable at period end, the Company makes provisions, where possible, for the estimated outcome of such claims or proceedings. Should a loss result from the resolution of any claims or proceedings that differs from these estimates, the difference will be accounted for as a charge to net income (loss) in that period.

As at May 31, 2019, and November 30, 2018, management was not aware of any pending or actual claims outstanding against the Company.

COMMITMENTS AND CONTINGENCIES

Milestones in acquisition of Panag

The Agreement for the acquisition of Panag contemplates the payment by the Company to the Vendors of an aggregate amount of up to $15,000,000 in cash in milestone payments upon the achievement of operational targets associated with marketing approvals and commercialization of both human and veterinary drug products by the U.S. Food and Drug Administration (FDA) and the European Medicines Agency (EMA). The Company is committed to fund Panag's research in an amount no less than $1,200,000 annually for a period of ten years after the closing date. In addition, in the event of a change of control of the Company within 24 months of the closing date of the proposed acquisition, the vendors would be entitled to receive from Tetra an additional $10 million. As a triggering event has not taken place, the contingent payments have not been reflected in these financial statements. Contingent payments The Company is party to certain management and employment contracts. These contracts require that additional payments of approximately $1,098,744 be made upon termination without cause. As a triggering event has not taken place, the contingent payments have not been reflected in these financial statements.


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University funding agreement During the year ended November 30, 2017 and amended January 2, 2019, the Company entered into an agreement with a university in Canada to support cannabis research. The Company has committed to provide $500,000 to this university over 5 years if certain conditions are met. As at May 31, 2019, the Company has made a payment of $150,000 towards this commitment based on certain contractual events being reached. The triggering events pertaining the remaining commitment of $350,000 has not taken place, contingent payments have not been reflected in these financial statements.

Investigational service contract

During the year ended November 30, 2017 (and amended during the year ended November 30, 2018), the Company entered into an investigational service contract for research and development. As at May 31, 2019 and under the terms of this agreement, the Company must pay approximately $785,000 based on certain research related milestones. Certain milestones were reached as at May 31, 2019 and as such approximately $355,000 in milestone payments were made as at May 31, 2019.

During the year ended November 30, 2018, the Company entered into a co-development, commercialization and marketing contract to share all costs related to research, development and clinical trial studies and all potential net profit on a 50-50 basis. Under the terms of this agreement, the Company must pay approximately $300,000 based on certain research related milestones. No milestones were reached as at May 31, 2019.

Service contracts

On December 21, 2018, the Company entered into two service agreements to write, prepare and submit Investigation New Drug (IND) documents for one product as required by US Food and Drug Administration (FDA). Under the terms of these agreements, the Company must pay approximately $372,000 based on certain related milestones. No milestones were reached as at May 31, 2019. License milestones The Company has a definitive agreement with IntelGenx Corp. that is subject to certain milestone payments relating to the research and development of Dronabinol totalling $1,350,000. The agreement is also subject to certain milestone payments and royalties related to sales. As a triggering event has not taken place, the contingent payments have not been reflected in these financial statements.


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RELATED PARTY TRANSACTIONS Transactions with key management personnel

May 31, 2019 May 31, 2018 May 31, 2019 May 31, 2018$ $ $ $

Consulting fees 17,083 75,833 68,333 276,583 Salary 336,402 229,539 627,148 358,411

353,485 305,372 695,481 634,994

Stock-based compensation 21,951 421,693 123,389 1,071,152 375,436 727,065 818,870 1,706,146

Six months endedThree months ended

As at May 31, 2019, directors and key management personnel were owed $Nil (November 30, 2018 - $21,059). As at May 31, 2019, Aphria Inc., a significant shareholder of the Company, was owed $Nil for Research and Development raw materials (November 30, 2018 - $162,051). These amounts are unsecured, non-interest bearing and due on demand, and are included in accounts payable and accrued liabilities. During the three and six months ended May 31, 2019, consulting fees of $17,083 (May 31, 2018 – $45,833) and $68,333 (May 31, 2018 – $89,583) respectively, were paid/payable to 9315-4466 Quebec Inc., a company controlled by a senior officer of one of Tetra’s subsidiary. As at May 31, 2019, there was a balance of $Nil (November 30, 2018 - $Nil) owing. These amounts are unsecured, non-interest bearing and due on demand, and are included in accounts payable and accrued liabilities. OUTSTANDING SHARE DATA

Authorized: the authorized share capital consists of an unlimited number of common shares each with no par value.

# of shares $Balance, November 30, 2018 162,831,631 34,841,667 Shares issued as part of warrants exercised 6,000,000 5,970,562 Shares issued as part of options exercised 100 134 Shares issued for acquisition of Panag Pharma Inc. 16,304,348 11,086,957 Balance, May 31, 2019 185,136,079 51,899,320

Share Capital

2019 Fiscal year issuances On May 1, 2019, 16,304,348 common shares with an estimated fair value of $0.68 per share for an aggregate consideration of $11,086,957 were issued as part of the Panag acquisition.


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During the six months ended May 31, 2019, a total of 6,000,000 common share purchase warrants were exercised for gross proceeds of $300,000. The warrants had an average exercise price of $0.05 and expired between February 16, 2019 and June 7, 2020. During the six months ended May 31, 2019, a total of 100 stock options were exercised for gross proceeds of $71. The stock options had an exercise price of $0.71. As at May 31, 2019, securities are as follow:

Securities Expiry Date Range of Exercise Price Number of Securities Outstanding

Common shares - - 185,136,079

Options Up to February 8, 2023 $0.18 to $1.50 4,825,000

Warrants Up to November 30, 2021 $1.29 to $1.30 23,772,800

The number of outstanding warrants which could be exercised for an equivalent number of common shares is as follows:

Number ofwarrants Exercise price Expiry date

$ $805,000 480,545 1.30 March 5, 2020275,800 136,749 1.30 March 29, 2020

11,500,000 4,683,395 1.30 March 5, 20214,292,000 1,747,795 1.30 March 29, 20216,900,000 2,613,352 1.29 November 30, 2021

23,772,800 9,661,836

Grant date fair value

The number of outstanding options which could be exercised for an equivalent number of common shares is as follows:

Options Options Exercise outstanding vested price Expiry date

$ $250,000 250,000 295,000 1.50 February 2, 2021125,000 125,000 150,000 1.50 June 2, 2021

2,550,000 2,550,000 1,604,909 0.71 July 24, 2021400,000 400,000 62,700 0.18 October 19, 2021125,000 125,000 153,750 1.50 October 2, 2021600,000 600,000 384,000 0.70 February 23, 2022400,000 400,000 220,809 0.75 April 4, 2022300,000 - 43,902 0.69 December 24, 202275,000 75,000 55,648 0.69 February 8, 2023

4,825,000 4,525,000 2,970,718

Vested grant date fair value


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FINANCIAL INSTRUMENTS AND RISK MANAGEMENT Fair Value

The carrying values of cash, accounts and sales taxes receivable, and accounts payable and accrued liabilities approximate their fair values due to the immediate or short-term maturity of these financial instruments. Categories of financial instruments

Financial instruments measured at fair value on the statement of financial position are classified using a fair value hierarchy that reflects the significance of the inputs used in making the measurements. The fair value hierarchy has the following levels: Level 1 - valuation based on quoted prices (unadjusted) in active markets for identical assets or liabilities; Level 2 - valuation techniques based on inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices); and Level 3 - valuation techniques using inputs for the asset or liability that are not based on observable market data (unobservable inputs). As at May 31, 2019 and November 30, 2018, the Company does not have any financial instruments recorded at fair value and that require classification in the fair value hierarchy.

RISK FACTORS The Company’s overall performance and results of operations are subject to a number of risks and uncertainties.

Risks Relating to Tetra and its Business

The Company's financial statements for the quarter ended May 31, 2019 show recurring operating losses and negative cash flows which may have an adverse effect on its relationships with current and future collaborators, contract suppliers and investors

May 31, 2019 $

November 30, 2018 $

Financial assets: Amortized cost Accounts and sales tax receivable 1,689,563 759,389 Cash 1,299,444 13,585,673 Financial liabilities Amortized cost Accounts payable and accrued liabilities (1,553,523) (2,543,734)


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Financial risk

The Company's activities expose it to a variety of financial risks in relation to financial instruments. The financial assets and liabilities by category are summarized in Note 18 of the unaudited condensed consolidated interim financial statements for the three and six months ended May 31, 2019. The main types of risks are credit risk and liquidity risk. Risk management is carried out by the Company's management team under policies approved by the Board of Directors. The Board of Directors also provides regular guidance for overall risk management.

Credit risk

Credit risk is the risk of loss associated with a counter party’s inability to fulfill its payment obligations. The Company's credit risk is primarily attributable to cash and accounts receivable. Cash is held with reputable Canadian chartered bank, from which management believes the risk of loss to be minimal. The Company periodically monitors the investments it makes and is satisfied with the creditworthiness of its Canadian chartered bank. The Company, in the normal course of business, is exposed to credit risk from its customer who is in the retail beverage industry. The accounts receivable are subject to normal industry risks. The Company attempts to manage these risks prior to the signing of distribution or licensing agreements by dealing with creditworthy customers; however, due to the limited number of potential customers in each market, this is not always possible. In addition, a customer’s creditworthiness may change subsequent to becoming a distributor and the terms and conditions in the agreement may prevent the Company from seeking new distributors in these territories during the term of the agreement. Significant customer As at May 31, 2019, the Company’s largest customer represented 100% (November 30, 2018 - 0%) of accounts receivable. Pursuant to their collective terms, accounts receivable were aged as follows:

May 31, 2019 November 30, 2018 $ $ Current - - 0 – 30 days past due 346,765 117,936 31 – 60 days past due 462,013 - Over 60 days past due 578,346 - 1,387,124 117,936


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The loss allowance provision as at May 31, 2019 is determined as follows and incorporates forward-looking information.

Current and less than 30

days past due

More than 30 days past due



Total

Expected loss rate 0% 0% 0% 20% Gross carrying amount $346,765 $462,013 $578,346 - $1,387,124 Loss allowance provision - - - - -

The revised impairment methodology under IFRS 9 did not generate a loss allowance provision for accounts receivable as at May 31, 2019 (November 30, 2018 - $nil). During the three and six months ended May 31, 2019, the Company has not recognized any bad debt expense (May 31, 2018 - $Nil). None of the Company's financial assets are secured by collateral or other credit enhancements.

Liquidity risk

Liquidity risk is the risk that the Company will not have sufficient cash resources to meet its financial obligations as they come due. The Company’s liquidity and operating results may be adversely affected if its access to the capital market is hindered, whether as a result of a downturn in stock market conditions generally or matters specific to the Company. The Company generates cash flow primarily from its financing activities. As at May 31, 2019, the Company had cash of $1,299,444 (November 30, 2018 - $13,585,673) and current liabilities of $1,553,523 (November 30, 2018 - $2,543,734). All of the Company's financial liabilities have contractual maturities of less than 30 days, and are subject to normal trade terms. The Company regularly evaluates its cash position to ensure preservation and security of capital as well as liquidity. During the three and six months ended May 31, 2019, the Company earned 100% (May 31, 2018 - 0%) of its product revenue from a single customer, Kombucha Baby Brewing Company (“Kombucha"). The Company earns product revenue from Kombucha pursuant to a distribution agreement. The loss of this customer would have a material adverse effect on the Company’s revenue, operating results and cash flows. The Company continues to seek business opportunities to diversify its customer base, in order to help mitigate this concentration risk. The ability to generate revenue sufficient to sustain the operations of the Company and provide positive cash flow from operations depends upon the ability to successfully commercialize its intellectual property or other product candidates that the Company develops or acquires in the future. There is no assurance that if regulatory approval is achieved for the product candidates, revenues will be generated. The ability to generate revenue further depends on additional factors, including:

• successful completion of development activities, including the additional pre-clinical studies and planned clinical trials for the product candidates;


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• completion and submission of new drug applications to the FDA;

• obtaining regulatory approval from the FDA for indications for which there is a commercial market;

• obtaining regulatory approval from Health Canada;

• completion and submission of applications to, and obtaining regulatory approval from, other foreign regulatory authorities; including but not limited to EMA

• raising substantial additional capital to fund operations;

• securing and maintaining strategic collaborations with partners to test, commercialize and manufacture product candidates;

• manufacturing approved products in commercial quantities and on commercially reasonable terms;

• developing a commercial organization, or finding suitable partners, to market, sell and distribute approved products;

• achieving acceptance among patients, clinicians and advocacy groups for any developed products;

• the successful grant of patents for drugs under development;

• obtaining coverage and adequate reimbursement from third parties, including government payors;

• setting a commercially viable price for any approved products; and

• being supported in pain clinical practice guideline (CPG’s).

Any doubt about the Company's ability to continue as a going concern may materially and adversely affect the price of the Common Shares, and it may be more difficult for the Company to obtain financing. Any doubt about the Company's ability to continue as a going concern may also adversely affect the Company's relationships with current and future collaborators, contract manufacturers and investors, who may become concerned about its ability to meet its ongoing financial obligations. If potential collaborators decline to do business with the Company or potential investors decline to participate in any future financings due to such concerns, the Company's ability to increase its financial resources may be limited. The Company has prepared its financial statements on a going concern basis, which assumes that the Company will be able to meet its commitments, realize its assets and discharge its liabilities in the normal course of business. The Company's consolidated financial statements do not include any adjustment to reflect the possible future effects on the recoverability and classification of assets or the amounts and classification of liabilities that may result from the outcome of this uncertainty.

General Risks Prospects for companies in the biopharmaceutical industry generally may be regarded as uncertain given the nature of the industry and, accordingly, investments in bio pharmaceutical companies should be regarded as speculative. Research and development involves a high and significant degree of risk. An investor should carefully consider the risks and uncertainties discussed in detail in the annual MD&A filed


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on SEDAR on March 15, 2019 for the year ended November 30, 2018 and the “Risk Factors” section of the Company’s AIF filed on June 18, 2019. APPROVAL The Board approved the disclosure contained in this MD&A on July 25, 2019. A copy of this MD&A will be provided to any shareholder who requests it from the Company.

DISCLAIMER The information provided in this document is not intended to be a comprehensive review of all matters and developments concerning the Company. It should be read in conjunction and in context with all other disclosure documents of the Company, including the Company’s Annual Information Form. The information contained herein is not a substitute for detailed investigation or analysis on any particular issue. No securities commission or regulatory authority has reviewed the accuracy of the information presented.

ADDITIONAL INFORMATION AND CONTINUOUS DISCLOSURE Additional information about the Company, including the Company’s Annual Information Form, is available on SEDAR at (www.sedar.com).

http://www.sedar.com/


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APPENDIX A: “Biopharmaceutical Segment” Overview:

In the Biopharmaceutical Segment, the Company is specialized in combining the traditional methods of medicinal cannabis use with the supporting scientific validation and safety data required for inclusion into the existing bio pharma industry by regulators, physicians and insurance companies. The initial focus is in the therapeutic areas of chronic pain, ophthalmology and oncology through a robust pipeline using multiple delivery systems. To distinguish itself, the Company’s business model is supported by three key pillars:

1. Rigorous clinical trials: Clinical trials are an essential component of our drug discovery and development programs. Pioneering research initiatives form the cornerstone upon which the company is built.

2. Patented delivery systems: The Company uses the most advanced medical devices, formulations and delivery systems to optimize patient care.

3. Pharmaceutical quality: Quality is at the forefront of what we do. We are dedicated to providing

exceptional pharmaceutical products to ensure efficacy and safety.

The Company has two products in late phase drug development (PPP011 and PPP002). Through its clinical trial data and inhalation research, the Company developed intellectual property to create new generations of cannabinoid drugs that are synthetic or isolate based. This research allowed the Company to transition from a plant-derived drug (PPP001) to a synthetic drug (PPP011) for advanced cancer patients. The Company has prioritized the development of its Caumz (PPP011) inhalation drug for advanced cancer patients.

In parallel, the Company acquired Panag as part of its vertical growth strategy and to ensure a pipeline of products for development and commercialization, notably its ophthalmic drug products for which the Company met with the FDA to discuss its clinical development program in June 2019. On May 2, 2019, Tetra obtained authorization from Health Canada to perform a clinical trial in dogs suffering from a painful eye disease.

Regulatory Framework

The FDA and Health Canada will ensure scrutiny on drug claims for products containing CBD/THC and will hold the same standard as for prescription drugs. The Company believes itself to be among the most advanced in North America in terms of clinical trial programs with cannabinoid-derived medicines considering its extensive work with Health Canada and the FDA. The Opioid Crisis The opioid crisis and epidemic affects millions of people in North America and shows no signs of slowdown. As one of the solutions to this societal problem, there is an increasing demand for alternative to opioids such as cannabis-based drugs that will replace the highly toxic and addictive side effects of opioids. Tetra


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Bio-Pharma wants to position itself as an important player in this new market and is dedicated to conducting rigorous clinical trials. The goal is to commercialize alternative products to opioids based on scientific evidence. Regulatory Phases and Timeline

In following chart 2 , as a guideline, we present the regulatory phases and time required from Drug Discovery to the Regulatory Approval process for prescription drugs. In the classical drug development pathway, the drug development process can take up to 15 years. As cannabinoids are unique, in that there is already a large body of preclinical evidence demonstrating safety and efficacy, the Company can significantly speed up the time-to-market and avoid the high costs associated with the Drug Discovery phase. Furthermore, the Drug Discovery process is high risk with the failure to move to the next phase estimated at 90%.


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1 Van Norman G.A. Drugs, Devices, and the FDA: Part 1 – An overview of approval processes for drugs. J Am Coll Cardiol Basic Trans Science 2016;1:170-179.

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