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Burcon NutraScience Corp
Symbol BU
Shares Issued 34,144,969
Close 2015-02-13 C$ 3.15
Market Cap C$ 107,556,652
Recent Sedar Documents

Burcon NutraScience loses $1.82-million in fiscal Q3

2015-02-16 16:28 ET - News Release

Mr. Johann Tergesen reports

BURCON REPORTS FISCAL 2015 THIRD QUARTER RESULTS

Burcon NutraScience Corp. has released its results for the fiscal third quarter ended Dec. 31, 2014.

Fiscal 2015 third quarter operational highlights:

  • Advanced discussions with a select group of multinational food ingredient providers about a royalty or a joint operations agreement for Peazazz.
  • Burcon's Winnipeg technical centre continued Peazazz applications work and sample production in response to requests from and in support of the analytical work being conducted by potential commercialization partners.
  • Burcon's exclusive manufacturing and marketing partner for Clarisoy soy protein, 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.
  • ADM completed its acquisition of WILD Flavors GmbH and formed a new business unit, WILD flavours and specialty ingredients, which includes the WILD business as well as ADM's specialty proteins product line, among others.
  • Burcon filed two new patent applications, and received a U.S. patent grant and a U.S. patent allowance. Including another U.S. patent grant subsequent to the quarter-end, the company's patent portfolio comprises 182 issued patents in various countries, including 57 in the United States, as well as more than 390 active patent applications, including 65 additional U.S. patent applications.
  • Subsequent to the quarter-end, Burcon completed a private placement with a respected group of U.S.-based investors for $1.65-million (U.S.).

Management commentary

"During the quarter, ADM continued to pursue development activities in the global food and beverage market with our Clarisoy soy protein," said Johann Tergesen, Burcon's president and chief operating officer. "Their acquisition of WILD Flavors GmbH gives ADM the ability to offer food and beverage companies a comprehensive suite of systems to enhance and improve their products. With the growing global demand for food and wellness ingredients in general, and a spotlight on protein ingredients in particular, ADM's new capability from the WILD Flavors acquisition bodes well for Clarisoy.

"During the quarter, we continued our efforts toward commercializing Burcon's other unique plant protein extraction technologies. We have focused on working with a select group of potential partners in the commercialization process for our Peazazz pea protein, and we are pleased with our efforts in moving the project forward. The Peazazz semi-works plant continues to support these ongoing discussions with due diligence visits, applications work and sample production. The potential partners' activities continued, including undertaking applications work and shelf life testing.

"Our Peazazz pea protein has a uniquely clean flavour and exceptional solubility characteristics. Between having no taste that can clash with other ingredients, and its high usability and nutritional value, Peazazz is ideal for incorporation into numerous beverage applications, as well as in a number of dairy alternative products. Peazazz can also enhance snacks, cereals and diet products, as well as fortify gluten-free, vegetarian and vegan food products. More than ever, we are hearing from food and beverage producers and the end-users looking to replace higher-priced dairy proteins. Peazazz's versatility has attracted the attention of the innovation specialists at a number of prominent companies.

"All together, we continue to enjoy tremendous opportunities with our patented and proprietary protein technologies. As we continue the commercialization phase of our growth, our positive outlook is strengthened by our expectations of earning royalty revenue from our already launched Clarisoy."

Fiscal third quarter financial results

Revenues totalled $31,000 in the third quarter, as compared with $24,000 in the prior quarter and the same quarter last year, 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.

Royalty revenues from the sale by ADM of Clarisoy as produced from its semi-works facility in Decatur, Ill., 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.

Third quarter net loss totalled $1.8-million or five cents per basic and diluted share, as compared with a net loss of $1.5-million or five cents per basic and diluted share in the same year-ago quarter.

Research and development expenses totalled $647,000 in the third quarter, increasing from $588,000 in the same year-ago quarter, due mostly to higher plant operating costs and stock-based compensation expense.

General and administrative expenses in the third quarter increased to $1.2-million from $1.1-million in the year-ago quarter. The higher G&A expenses are attributed to an increase of $115,000 in patent legal fees and expenses from higher activity levels, and offset mainly by a decrease in investor relations expenses due to an extensive European road show undertaken in the third quarter of last year.

At Dec. 31, 2014, cash totalled $3.0-million compared with $1.4-million at March 31, 2014. Subsequent to the quarter-end, Burcon completed a private placement for $1.65-million (U.S.). Together with the proceeds from the private placement, management believes it has sufficient resources to finance its expected level of operations and working capital requirements until at least November, 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 on the Burcon website or on SEDAR.

Conference call

Burcon will host a conference call tomorrow, Tuesday, Feb. 17, 2015. Company management will host the presentation, followed by a question-and-answer period.

Date:  Tuesday, Feb. 17, 2015

Time:  2 p.m. Eastern Time (11 a.m. Pacific Time)

Dial-in number (toll/international):  1-719-325-2435

Toll-free dial-in number (North America):  1-888-438-5525

Conference ID:  1090299

A replay of the call will be available after 8 p.m. Eastern Time on the same day through March 17, 2015.

Replay dial-in number (toll/international):  1-858-384-5517

Toll-free dial-in number (North America):  1-877-870-5176

Replay conference ID:  1090299

        CONDENSED CONSOLIDATED INTERIM STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS
                   For the three and nine months ended Dec. 31, 2014, and 2013

                                                     Three months ended         Nine months ended
                                                           Dec. 31,                  Dec. 31,
                                                      2014         2013         2014         2013
Revenue
Royalty income                                     $30,930      $23,750      $79,879      $71,108
Expenses
General and administrative                       1,228,572    1,100,423    3,312,251    3,166,300
Research and development                           646,503      587,711    1,870,658    1,794,296
                                                 1,875,075    1,688,134    5,182,909    4,960,596
(Loss) from operations                          (1,844,145)  (1,664,384)  (5,103,030)  (4,889,488)
Interest and other income                           14,895      126,025       61,395      166,659
(Loss and comprehensive loss) for the period    (1,829,250)  (1,538,359)  (5,041,635)  (4,722,829)
Basic and diluted (loss) per share                   (0.05)       (0.05)       (0.15)       (0.15)

We seek Safe Harbor.

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