Burcon Reports Fiscal Fourth Quarter and Year 2014 Results
VANCOUVER, British Columbia, June 23, 2014 (GLOBE NEWSWIRE) -- 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
oBurcon 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.
oCompleted 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.
oSigned 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.
oCommenced and advanced discussions with a number of key potential
multi-national food ingredient providers about a royalty or a joint
operations agreement for Peazazz®.
oCanadian 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.
oReceived 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.
oBurcon'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.
oReceived 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.
oReceived 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.
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 statusas it transitionsto
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
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.
Burcon will host a conference call later today, Monday, June 23, 2014. Company
management will host the presentation, followed by a question and answer
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)
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
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
Accounts payable and accrued liabilities 572,908 447,884
Deferred revenue 226,763 320,596
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)
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
$ $ $ $
Royalty income 23,616 23,479 94,724 30,309
General and 787,727 830,666 3,954,026 3,558,693
Research and 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 124,748 26,144 291,406 85,790
Loss and comprehensive (1,238,716) (1,402,487) (5,961,545) (5,545,522)
loss for the period
Basic and diluted loss (0.04) (0.04) (0.19) (0.18)
CONTACT: Media & Industry Contact:
Director, Corporate Development
Burcon NutraScience Corporation
Tel (604) 733-0896, Toll-free (888) 408-7960
Investor Relations Contact:
Michael Koehler or Matt Glover
Liolios Group Inc.
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