Burcon NutraScience Corporation (TSX:BU) (Nasdaq:BUR), a leader in
functional, renewable plant proteins, reported results for the
fiscal fourth quarter and year ended March 31, 2014.
Fiscal 2014 Operational Highlights
- Burcon showcased its revolutionary clean-tasting Peazazz® pea
protein in two beverage applications at the 2013 Institute of Food
Technologists (IFT) Annual Meeting and Food Expo.
- Completed the construction, commission and startup of the
Peazazz® semi-works production plant to provide the large
quantities of Peazazz® required by customers and potential partners
for evaluation and product development, as well as to demonstrate
production from scalable, commercial-level manufacturing equipment.
- Signed Peazazz® material transfer agreements (MTAs) with a
variety of interested parties, including major food and beverage
makers, suppliers, and potential industry production and sales
partners.
- Commenced and advanced discussions with a number of key
potential multi-national food ingredient providers about a royalty
or a joint operations agreement for Peazazz®.
- Canadian Institute of Food Science and Technology (CIFST)
recognized the introduction of CLARISOY™ soy protein as a
"significant innovation", with the CIFST 2013 Food Innovation
Award, noting that CLARISOY™ has "a combination of functional
properties, neutral flavor and high nutritional value that is
unlike anything else on the plant protein market today." This is
the second major industry award for CLARISOY™ after winning the
InterBev 'Best Beverage Ingredient Concept' Award in 2012.
- Received a notice of allowance from the U.S. Patent and
Trademark Office for CLARISOY™'s first composition of matter
patent, which was granted in April 2014. This composition of matter
patent provides protection over the commercially valuable
attributes of CLARISOY™, which include, amongst others, its unique
solubility and transparency in solution, and absence of taste or
smell.
- Burcon's exclusive manufacturing and marketing partner for
CLARISOY™, Archer Daniels Midland Company (ADM), facilitated
CLARISOY™ development activities in the global food and beverage
market while operating the world's first CLARISOY™ semi-works plant
to produce samples of the CLARISOY™ soy protein line for market
development purposes.
- Received written notice from ADM that it intends to expand to
full-commercial scale production of CLARISOY™ soy protein based on
market demand and customer development activities currently
underway.
- Received patent grants for 14 U.S. patents and subsequent to
the end of the fiscal year, the company was granted three
additional U.S. patents, bringing the company's patent portfolio to
220 issued patents in various countries, including 55 in the U.S.,
as well as more than 400 active patent applications, including 59
additional U.S. patent applications.
Management Commentary
Over the course of the past year, Burcon realized important and
significant advancements for its lead product CLARISOY™ soy
protein. Two major developments in particular are expected to have
an important long-term impact on royalty revenue to be earned from
the CLARISOY™ License and Production Agreement between Burcon and
ADM. First was the grant by the U.S. Patent and Trademark Office of
a composition of matter patent over CLARISOY™ itself. This marked
the first ever CLARISOY™ composition of matter claims to be
allowed. Composition of matter claims are important because they
provide protection over the commercially valuable attributes of
CLARISOY™. The second major development was the announcement by ADM
of their intention to expand commercial production of CLARISOY™.
These two developments taken together speak to the potential for
Burcon to earn royalty income for years to come.
During the past year Burcon realized similarly important
developments with its second major technology, its Peazazz® pea
protein. After officially launching Peazazz® at the 2013 IFT Expo
in Chicago, Burcon completed the startup and commissioning of a
semi-works production facility, which utilizes commercial-scale
equipment and is capable of producing the tonnage amounts of
Peazazz® required by food and beverage makers looking to conduct
full-scale, real-world market evaluations of Peazazz® in their
consumer products.
The semi-works plant also supports Burcon's ongoing discussions
with companies who are potential partners with Burcon for the
production and marketing of Peazazz®. Discussions with potential
partners progressed well during the past year and could take the
form of a royalty agreement, consistent with how Burcon has
commercialized CLARISOY™, or alternatively through a structure
whereby Burcon is directly involved in building-out production
capabilities. These partnership discussions will be a main
area of focus for Burcon in the coming year.
Looking forward, Burcon is encouraged by the recent announcement
by ADM of its intention to demonstrate CLARISOY™-170, the newest
CLARISOY™ in ADM's CLARISOY™ portfolio, at the upcoming 2014 IFT
Expo in New Orleans. Burcon is similarly encouraged by the
recent announcements from ADM's Foods & Wellness group and in
particular the announcement of ADM's commitment to build a soy
protein production complex in Campo Grande, Brazil which ADM
estimates is an investment of approximately US$250
million. ADM describes its Foods & Wellness Group as a
global market leader in food-grade proteins, offering a range of
innovative specialty ingredients and products for the beverage,
meat, snack, bakery, cereal, wellness and personal care
markets.
These announcements by ADM are encouraging when viewed within
the backdrop of the accelerating demand for protein ingredients
globally. Burcon believes it is extremely well positioned,
both through the royalty arrangement with ADM on CLARISOY™ and the
partnership discussions for Peazazz® to derive benefits from the
global trend for protein and health-and-wellness in general.
Fiscal Fourth Quarter and Full Year
Financial Results (Dollars in Canadian)
Revenues totaled $24,000 in the fiscal fourth
quarter, which was consistent with the prior quarter and the same
year-ago period, and were derived mainly from deferred royalty
payments from ADM for CLARISOY™ sales. The nominal revenues reflect
the company's development phase status as it
transitions to the commercial stage. Revenues for the fiscal
year totaled $95,000 compared to $30,000 in fiscal 2013, which were
also derived mainly from deferred royalty payments from ADM.
Royalty revenues from the sale by ADM of CLARISOY™
as produced from their semi-works facility in Decatur, Illinois
have been marginal. The main purpose of the semi-works plant
has been to provide commercial samples for market development
purposes and to facilitate other product development
work.
Fourth quarter net loss totaled $1.2 million or
$(0.04) per basic and diluted share, as compared to a net loss of
$1.4 million or $(0.04) per basic and diluted share in the same
year-ago quarter. For the full fiscal year, net loss totaled $6.0
million or $(0.19) per basic and diluted share, as compared to a
net loss of $5.5 million or $(0.18) per basic and diluted share in
fiscal 2013.
Research and development (R&D) expenses
totalled $599,000 in the fourth quarter, decreasing from $621,000
in the same year-ago quarter. The decrease is due mainly to a
decrease of $28,000 in plant operating costs, offset by an increase
of $6,000 in R&D salaries. For the fiscal year, R&D
expenses increased to $2.4 million from $2.1 million in fiscal
2013. Including the $123,000 of CLARISOY™-related expenses that
were deferred in the first quarter of last year, the actual
increase in R&D expenses was $168,000 over fiscal
2013. This increase is attributed mainly to an increase in
amortization of deferred development costs of $134,000, an increase
in stock-based compensation expense of $87,000, offset by a
decrease in plant operating costs of $26,000 and a decrease in
R&D travel costs of $27,000.
General and administrative (G&A) expenses in
the fourth fiscal quarter decreased to $788,000 from $831,000 in
the year-ago quarter, and increased to $4.0 million in fiscal 2014
from $3.6 million in the fiscal 2013. The decrease in G&A
expenses for the quarter is due mainly to a decrease in patent
legal fees. During the year, Burcon abandoned certain non-core
canola patents that it deemed to be unessential for the purposes of
achieving its strategic objectives in non-U.S.
countries. Including the $132,000 of CLARISOY™-related patent
expenses that were deferred in the first quarter of last year,
G&A expenses for the year have increased $263,000 over fiscal
2013, due mostly to the company's expanding patent portfolio and
activity levels.
At March 31, 2014, cash and short-term investments totaled $1.4
million compared to $6.7 million at March 31, 2013. In April
2014, Burcon completed a rights offering that provided net cash
proceeds of $5.0 million. Management believes it has sufficient
resources to fund its expected level of operations and working
capital requirements until at least July 2015. This estimate does
not take into account potential proceeds from outstanding
convertible securities, anticipated increases in royalty revenues
from the sale of CLARISOY™, or any other potential revenue from
product sales or licensing.
The company's complete financial statements, along with
management's more detailed discussion and analysis, are available
from the company's Investors section at www.burcon.ca or from
www.sedar.com.
Conference Call
Burcon will host a conference call later today, Monday, June 23,
2014. Company management will host the presentation, followed by a
question and answer period.
Date: Monday, June 23, 2014 |
Time: 5:00 p.m. Eastern time (2:00 p.m.
Pacific time) |
Dial-in (toll/international):
1-719-325-2428 |
Toll-free dial-in (North America):
1-888-364-3109 |
Conference ID: 5681800 |
A replay of the call will be available after 8:00 p.m. Eastern
time on the same day through July 23, 2014.
Replay dial-in (toll/international):
1-858-384-5517 |
Toll-free dial-in (North America):
1-877-870-5176 |
Replay conference ID: 5681800 |
About Burcon NutraScience Corporation
Burcon NutraScience is a leader in developing functionally and
nutritionally valuable plant-based proteins. The company has
developed a portfolio of composition, application, and process
patents originating from a core protein extraction and purification
technology. Burcon's CLARISOY™ soy protein offers clarity and
high-quality protein nutrition for low pH beverage systems and
excellent solubility and exceptionally clean flavor at any pH;
Peazazz® is a uniquely soluble and clean-tasting pea protein; and
Puratein®, Supertein™ and Nutratein® are canola protein isolates
with unique functional and nutritional attributes. For more
information about the company, visit www.burcon.ca.
ON BEHALF OF THE BOARD OF DIRECTORS |
"Johann F. Tergesen" |
Johann F. Tergesen |
President and Chief Operating Officer |
The TSX has not reviewed and does not accept responsibility for
the adequacy of the content of the information contained herein.
This press release contains forward-looking statements or
forward-looking information within the meaning of the U.S. Private
Securities Litigation Reform Act of 1995 and applicable Canadian
securities legislation. Forward-looking statements or
forward-looking information involve risks, uncertainties and other
factors that could cause actual results, performances, prospects
and opportunities to differ materially from those expressed or
implied by such forward-looking statements. Forward-looking
statements or forward-looking information can be identified by
words such as "anticipate," "intend," "plan," "goal," "project,"
"estimate," "expect," "believe", "future," "likely," "may,"
"should," "could", "will" and similar references to future
periods. All statements other than statements of historical
fact included in this release are forward-looking statements,
including, without limitation, statements regarding plans and
timing for the introduction or enhancement of our products,
statements about the type of business structure with potential
strategic partners, statements about future market conditions,
supply and demand conditions, and other expectations, intentions
and plans contained in this press release. There can be no
assurance that such statements will prove to be accurate and actual
results and future events could differ materially from those
anticipated in such statements or information. Important factors
that could cause actual results to differ materially from Burcon's
plans and expectations include the actual results of business
negotiations, marketing activities, adverse general economic,
market or business conditions, regulatory changes and other risks
and factors detailed herein and from time to time in the filings
made by Burcon with securities regulators and stock exchanges,
including in the section entitled "Risk Factors" in Burcon's annual
information form dated June 23, 2014 filed with the Canadian
securities administrators on www.sedar.com and contained in
Burcon's 40-F filed with the U.S. Securities and Exchange
Commission on www.sec.gov. Any forward-looking statement or
information only speaks as of the date on which it was made and,
except as may be required by applicable securities laws, Burcon
disclaims any intent or obligation to update any forward-looking
statement, whether as a result of new information, future events or
otherwise. Although Burcon believes that the assumptions inherent
in the forward-looking statements are reasonable, forward-looking
statements are not guarantees of future performance, and
accordingly, investors should not rely on such statements.
CLARISOY is a trademark of Archer Daniels Midland Company.
Burcon NutraScience
Corporation |
Consolidated
Balance Sheets |
As at March 31,
2014 and 2013 |
(Prepared in Canadian
dollars) |
|
2014 |
2013 |
|
$ |
$ |
Assets |
|
|
|
|
|
Current
assets |
|
|
Cash and cash equivalents |
1,392,467 |
4,602,520 |
Short-term investments |
-- |
2,085,746 |
Amounts receivable |
140,941 |
34,524 |
Prepaid expenses |
165,390 |
153,543 |
|
|
|
|
1,698,798 |
6,876,333 |
|
|
|
Property and
equipment |
664,115 |
559,920 |
|
|
|
Deferred financing
costs |
215,251 |
-- |
|
|
|
Deferred development
costs |
1,289,592 |
1,823,217 |
|
|
|
Goodwill |
1,254,930 |
1,254,930 |
|
|
|
|
5,122,686 |
10,514,400 |
|
|
|
Liabilities |
|
|
|
|
|
Current
liabilities |
|
|
Accounts payable and accrued
liabilities |
572,908 |
447,884 |
|
|
|
Deferred
revenue |
226,763 |
320,596 |
|
|
|
|
799,671 |
768,480 |
|
|
|
Shareholders'
Equity |
|
|
Capital stock |
54,005,703 |
54,005,703 |
Contributed surplus |
6,136,123 |
5,065,951 |
Options |
8,532,700 |
9,064,232 |
Warrants |
49,453 |
49,453 |
Deficit |
(64,400,964) |
(58,439,419) |
|
|
|
|
4,323,015 |
9,745,920 |
|
|
|
|
5,122,686 |
10,514,400 |
|
|
|
|
|
|
Burcon NutraScience
Corporation |
Consolidated
Statements of Operations and Comprehensive Loss |
For the quarters
and years ended March 31, 2014 and 2013 |
(Prepared in Canadian
dollars) |
|
|
|
|
|
|
Three months
ended March 31, |
Years ended
March 31, |
|
2014 |
2013 |
2014 |
2013 |
|
$ |
$ |
$ |
$ |
|
(unaudited) |
(unaudited) |
|
|
|
|
|
|
|
Revenue |
|
|
|
|
Royalty income |
23,616 |
23,479 |
94,724 |
30,309 |
|
|
|
|
|
|
|
|
|
|
Expenses |
|
|
|
|
General and administrative |
787,727 |
830,666 |
3,954,026 |
3,558,693 |
Research and development |
599,353 |
621,444 |
2,393,649 |
2,102,928 |
|
|
|
|
|
|
1,387,080 |
1,452,110 |
6,347,675 |
5,661,621 |
|
|
|
|
|
Loss from
operations |
(1,363,464) |
(1,428,631) |
(6,252,951) |
(5,631,312) |
|
|
|
|
|
Interest and other
income |
124,748 |
26,144 |
291,406 |
85,790 |
|
|
|
|
|
Loss and comprehensive loss for
the period |
(1,238,716) |
(1,402,487) |
(5,961,545) |
(5,545,522) |
|
|
|
|
|
Basic and diluted loss per
share |
(0.04) |
(0.04) |
(0.19) |
(0.18) |
|
|
|
|
|
CONTACT: Media & Industry Contact:
Michael Kirwan
Director, Corporate Development
Burcon NutraScience Corporation
Tel (604) 733-0896, Toll-free (888) 408-7960
mkirwan@burcon.ca
www.burcon.ca
Investor Relations Contact:
Michael Koehler or Matt Glover
Liolios Group Inc.
(949) 574-3860
bur@liolios.com
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