DGAP-News: Burcon Reports Fiscal Fourth Quarter and Year 2014 Results
DGAP-News: Burcon NutraScience Corp. / Key word(s): Final Results
Burcon Reports Fiscal Fourth Quarter and Year 2014 Results
24.06.2014 / 13:45
Burcon Reports Fiscal Fourth Quarter and Year 2014 Results
Vancouver, British Columbia, June 23, 2014 - 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(R) 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(R)
semi-works production plant to provide the large quantities of
Peazazz(R) 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(R) 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(R).
- Canadian Institute of Food Science and Technology (CIFST) recognized
the introduction of CLARISOY(TM) soy protein as a "significant
innovation", with the CIFST 2013 Food Innovation Award, noting that
CLARISOY(TM) 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(TM) 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(TM)'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(TM),
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(TM), Archer Daniels Midland Company (ADM), facilitated
CLARISOY(TM) development activities in the global food and beverage
market while operating the world's first CLARISOY(TM) semi-works plant
to produce samples of the CLARISOY(TM) soy protein line for market
- Received written notice from ADM that it intends to expand to
full-commercial scale production of CLARISOY(TM) 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
Over the course of the past year, Burcon realized important and significant
advancements for its lead product CLARISOY(TM) 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(TM) 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(TM) itself. This marked the first ever CLARISOY(TM) composition
of matter claims to be allowed. Composition of matter claims are important
because they provide protection over the commercially valuable attributes
of CLARISOY(TM). The second major development was the announcement by ADM
of their intention to expand commercial production of CLARISOY(TM). 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(R) pea protein. After officially
launching Peazazz(R) 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(R) required by food and beverage makers looking to
conduct full-scale, real-world market evaluations of Peazazz(R) in their
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(R). 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(TM), 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(TM)-170, the newest CLARISOY(TM) in
ADM's CLARISOY(TM) 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
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(TM) and the partnership discussions for
Peazazz(R) 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(TM) 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(TM) 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
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(TM)-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(TM)-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(TM), 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
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(TM) 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(R) is a uniquely soluble and clean-tasting
pea protein; and Puratein(R), Supertein(TM) and Nutratein(R) 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.
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.
End of Corporate News
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