DGAP-News: Burcon NutraScience Corp.: BURCON ANNOUNCES YEAR-END RESULTS, REVIEWS OPERATIONS
(firmenpresse) - DGAP-News: Burcon NutraScience Corp. / Key word(s): Final Results
Burcon NutraScience Corp.: BURCON ANNOUNCES YEAR-END RESULTS, REVIEWS
OPERATIONS
26.06.2012 / 12:49
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BURCON ANNOUNCES YEAR-END RESULTS,
REVIEWS OPERATIONS
Vancouver, British Columbia, June 25, 2012 - Burcon NutraScience
Corporation (TSX - BU, NASDAQ - BUR) ('Burcon') today reported financial
results for the fiscal year ended March 31, 2012 and provided a review of
the year's operations.
A summary of the highlights of the past year includes:
- Archer Daniels Midland Company ('ADM') launched CLARISOY(TM) 100, the
first product in the CLARISOY(TM) line, at the IFT Annual Meeting and
Food Expo in June 2011. ADM also announced that they will launch the
first extension of CLARISOY(TM) at the 2012 IFT Annual Meeting and Food
Expo in June 2012;
- ADM announced the opening of its first commercial-scale plant to make
CLARISOY(TM);
- In October 2011, Burcon's common shares commenced trading on The NASDAQ
Global Market under the symbol 'BUR';
- Developed PEAZAZZ(TM), a novel pea protein that is 100% soluble and
transparent in low pH solutions with clean flavour characteristics and
is heat stable permitting hot fill applications;
- Filed several patent applications over novel or alternative processes
for the production and functional applications of, and functional
attributes of CLARISOY(R) soy protein, as well as over the composition
and functional applications of canola protein isolates;
- Nine U.S. patents granted over Burcon's canola protein patent
applications; and
- Canola License and Development agreement with ADM terminated on March
1, 2012.
Since the signing of the License and Production Agreement with ADM in March
2011 for CLARISOY(TM) soy protein, Burcon's scientific team has been
focused on further optimization of the CLARISOY(TM) process and further
improvements of the final products, including increasing yields and
improving economics. In addition, the Winnipeg Technical Centre focused on
gathering data required for scale-up to production plant and equipment
selection and provided assistance in the start-up of the semi-works
facility. Burcon produced significant quantities of CLARISOY(TM) samples
for ADM customer evaluations.
Burcon announced it had developed a novel pea protein isolate that it has
branded PEAZAZZ(TM). PEAZAZZ(TM) pea protein may be used in a variety of
healthy consumer product applications and should be of interest to
companies looking for a functional alternative plant protein ingredient.
Until April 2012, Burcon held exclusive negotiations with a potential
partner to commercialize PEAZAZZ(TM) pea protein and the associated protein
extraction technology. On April 23, 2012, Burcon announced that although
discussions with this potential partner are ongoing, the exclusivity period
had lapsed. Therefore, Burcon will consider additional routes-to-market
for its PEAZAZZ(TM) pea protein.
On March 1, 2011, Burcon and ADM amended the License and Development
Agreement (the 'Canola Agreement') to provide a one-year extension to the
development period to March 1, 2012 to facilitate continued research aimed
at expanding the commercial value of Puratein(R) and Supertein(TM) canola
protein isolates. Burcon agreed to reimburseADM for its share of the U.S.
regulatory recognition process of US$360,000 (CA$359,100) if ADM chose not
to proceed with the license under the Canola Agreement. These funds were
deposited into an interest-bearing escrow account held in trust for Burcon
and ADM and would be released to ADM if Burcon and ADM did not agree to any
further extensions and amendments by March 1, 2012. Upon ADM's receipt of
the escrow funds, all intellectual property, reports, studies or other
materials prepared by ADM, Burcon or by a third party in connection with
the U.S. regulatory recognition process would be deemed to be owned solely
by Burcon and ADM would have no further rights with respect thereto. The
Canola Agreement terminated on March 1, 2012 and the funds held in escrow
were released to ADM in April 2012. Given the termination of the Canola
Agreement, Burcon is free to choose alternative paths for the
commercialization of its technology for the production of its canola
proteins: Puratein(R), Supertein(TM) and Nutratein(TM) canola protein
isolates.
In the case of Puratein(R) and Supertein(TM) canola protein isolates,
Burcon continues to work with food and beverage manufacturers to establish
the value of Burcon's proteins in their food products. Burcon has executed
material transfer agreements with certain major companies. In the case of
Nutratein(TM) canola protein isolate, Burcon has been in discussions with a
leading animal nutrition company with the intention of using Nutratein(TM)
canola protein isolate to replace or partially replace dairy protein in
certain animal feed applications.
For the coming year, Burcon's objectives are to further the development and
commercialization of its soy, canola and pea products.
Soy
Burcon will support ADM in connection with its development of a commercial
facility for the production, marketing and sale of CLARISOY(TM) soy
protein.
Canola
Burcon plans to conduct further research and development to establish the
unique functional and nutritional characteristics of Supertein(TM),
Puratein(R) and Nutratein(TM) canola protein isolates. In respect of
Nutratein(TM), Burcon will refine the pilot process to produce a consistent
product of optimum quality, flavour, colour, aroma, amino acid profile,
nutritional and functional attributes. Burcon also intends to pursue a
collaboration with animal feed manufacturers on animal and/or fish feeding
trials using Nutratein(TM). Burcon will continue to pursue product
development agreements with major food, beverage and nutritional product
companies to develop improved or novel applications for Supertein(TM) and
Puratein(R) canola protein isolates into their products. Burcon will also
continue to pursue a strategic alliance with a potential partner in
connection with the development of a commercial facility for the
production, marketing and sale of Burcon's canola protein isolates.
Pea
Burcon intends to pursue product development agreements with major food,
beverage and nutritional product companies to develop improved or novel
applications for PEAZAZZ(TM) pea protein into their products. Burcon will
also pursue a strategic alliance with a potential partner in connection
with the development of a commercial facility for the production, marketing
and sale of PEAZAZZ(TM) pea protein.
Burcon will continue to refine its protein extraction and purification
technologies, develop new technologies and related products. In addition,
Burcon will further strengthen and expand its intellectual property
portfolio. Burcon will also explore opportunities for acquiring or
licensing into Burcon, novel technologies that will complement or enhance
Burcon's intellectual property portfolio and business initiatives.
Financial Results and Highlights
Burcon reported a loss of $5,962,342 ($0.20 per share) for the year as
compared to $8,806,474 ($0.30 per share) in the prior year. Included in
the loss amount reported is stock-based compensation (non-cash) costs of
$1,716,062 (2011 - $4,091,119). The other non-cash costs included in the
loss for the year are amortization of $101,148 (2011 - $178,050) and gain
on disposal of property and equipment of $3,359 (2011 - $nil).
In March 2011, the Company determined that it had met all the criteria of
deferring development costs with respect to CLARISOY(TM) and commenced
deferring these expenditures. During the year, Burcon deferred a total of
$1,778,888 (2011 - $190,284) of these development expenditures. Burcon
expensed about $1,040,000 in R&D expenditures (2011 - $2,890,000). Over
one-half of R&D expenditures are comprised of salaries and benefits.
Before capitalizing salaries and benefits to deferred development costs,
the cash portion of salaries and benefits increased by approximately
$128,000 over fiscal 2011. About $83,000 of the increase is due to the
addition of new technical staff at the WTC, and the balance due to annual
salary increases. Other R&D expenditures, such as laboratory operation,
analyses and testing expenses also increased (before capitalization to
deferred development costs) due to increased CLARISOY(TM) activity levels.
In 2011, Burcon agreed to reimburse ADM for its share of the GRAS
regulatory recognition process pursuant to the amendment of the Canola
Agreement. The amount of US$360,000 was recorded as R&D expenditures in
fiscal 2011.
General and administrative expenses decreased by about $993,000 over the
prior year. Included in salaries and benefits is stock-based compensation
expense of approximately $1,597,000 (2011 -$2,941,000). Options granted to
directors this year were vested immediately and a related fair value of
about $995,000 was recorded as stock-based compensation expense.
Similarly, options granted to directors last year also vested immediately
and a related fair value of about $538,000 was recorded as stock-based
compensation. This increase was offset by a decrease in stock-based
compensation expense of about $1.6 million for options granted in December
2009 that had completed vesting during this year.
The cash portion of salaries and benefits increased by about $529,000 over
the prior year due to the full-year effect of two of the Company's officers
that transferred their employment from a related party to Burcon in late
fiscal 2011, the hiring of a director of corporate development and a
business development analyst also late last year, and a salary increase,
including a retroactive salary adjustment, for a senior officer.
Directors' fees also increased by about $38,000 due to additional board and
committee meetings held during this year. As a result of the transfer of
employment of the two officers from the related party to Burcon, management
fees charged by the related party decreased this year by $127,000 from the
prior year.
Patent legal fees and expenses account for a significant portion of
Burcon's professional fees. Burcon's patent strategy is to aggressively
seek protection for new technologies as well as further protecting current
technologies. During the year, Burcon capitalized about $651,000 (2011 -
$2,000) of patent costs to deferred development costs. Total patent legal
fees and expenditures (before capitalization) increased by about $674,000
over the prior year. As noted above, Burcon filed five new patents (2011 -
six) during the year, and nine patent applications (2011 - five) entered
national phase, which generated significant filing fees in various
countries. Most of the patent applications that entered national phase in
the prior year occurred during the last quarter, and the related
expenditures continued into the early part of the current year. From
inception, Burcon has expended approximately $7.5 million on patent legal
fees and disbursements to strengthen its patent portfolio in various
countries of the world and file patent applications for new inventions.
Burcon incurred about $230,000 in legal and audit expenses related to our
NASDAQ listing. As well, audit fees increased by about $50,000 as a result
of the NASDAQ listing. This was offset by legal fees of about $47,000 in
the prior year relating to the ADM CLARISOY agreement.
The decrease in consulting fees is due primarily to the financial advisory
fee of about $510,000 paid last year for the negotiation and finalization
of the CLARISOY(TM) agreement.
Included in investor relations expenses is approximately $7,000 (2011 -
$67,000) of stock-based compensation expense. The cash portion of investor
relations expenses increased by approximately $14,000. TSX and NASDSAQ
fees accounted for about $39,000 of the increase, which was offset by a
decrease in public relations fees of about $31,000. Travel expenses also
increased by about $28,000, offset by a decrease in a newly-designed
website last year of about $32,000.
At March 31, 2012, the Company's cash and short-term investment totaled
approximately $6,159,000, as compared to approximately $11,932,000 at March
31, 2011. Management believes it has sufficient resources to fund its
expected level of operations and working capital requirements to at least
May 2013, excluding proceeds from outstanding convertible securities and
royalty revenues that may be derived from the semi-works commercial
facility. Burcon intends to raise additional capital to fund its
operations and business objectives through an equity offering within the
next twelve months.
About Burcon NutraScience
Burcon is a leader in nutrition, health and wellness in the field of
functional, renewable plant proteins. Since 1999, Burcon has developed a
portfolio of composition, application, and process patents originating from
our core protein extraction and purification technology. We have developed
CLARISOY(TM) soy protein, the only vegetable-based protein that offers
clarity and complete protein nutrition for low pH beverage systems;
PEAZAZZ(TM) a uniquely soluble and clean-tasting pea protein and
Puratein(R), Supertein(TM) and Nutratein(TM) canola protein isolates with
unique functional and nutritional attributes. Our team of highly
specialized scientists and engineers work from our private research
facility to develop and optimize environmentally sound technologies.
To-date, our patent portfolio consists of 191 issued patents in various
countries, including 34 issued U.S. patents, and in excess of 375
additional pending patent applications, 74 of which are U.S. patent
applications.
CLARISOY(TM) is under license from Archer Daniels Midland Company.
CLARISOY(TM) is a trademark of Archer Daniels Midland Company.
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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 that involve risks and
uncertainties. These forward-looking statements relate to, among other
things, plans and timing for the introduction or enhancement of our
products, statements about future market conditions, supply and demand
conditions, and other expectations, intentions and plans contained in this
press release that are not historical fact. Our expectations regarding the
prospect for future success depend upon our ability to develop and sell
products, which we do not produce today and cannot be sold without further
research and development. When used in this press release, the words
'goal', 'intend', 'believes' and 'potential' and similar expressions,
generally identify forward-looking statements. These statements reflect our
current expectations. They are subject to a number of risks and
uncertainties. In light of the many risks and uncertainties surrounding the
development of a source of protein from canola meal, you should understand
that we cannot assure you that the forward looking statements contained in
this press release will be realized.
For more information, please contact:
Michael Kirwan, Director, Corporate Development
Burcon NutraScience Corporation
(604) 733-0896 / (888) 408-7960 toll-free
mkirwan(at)burcon.ca www.burcon.ca
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