Burcon NutraScience Corporation, a leader in functional, renewable plant proteins, reported results for the fiscal second quarter ended September 30, 2013.
"During the quarter, we made continued strong progress toward commercializing Burcon's unique plant protein extraction technologies," said Johann Tergesen, the company's president and COO. "This included the completion of our Peazazz semi-works facility, which coincided with our launch of Peazazz at the IFT Expo in July. Peazazz was well-received by major food and beverage makers as well as potential alliance partners. In fact, we have had initial discussions on the commercialization of our Peazazz protein with some of these companies."
"ADM has continued to facilitate development activities in the global food and beverage market with our CLARISOY soy protein."
"Our ongoing efforts to expand and protect our intellectual property portfolio around our proprietary plant protein science have resulted in 13 new U.S. patents since the beginning of the calendar year. These efforts will continue to be a major area of focus, as will our pursuit of further perfecting the science that makes our proteins already so exceptional."
"It's clear our market timing couldn't be more ideal with producers and end users looking to replace higher priced dairy proteins," continued Tergesen. "Our Peazazz pea protein has a uniquely clean flavor, so 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 enhance snacks, cereals and diet products, as well as fortify gluten-free, vegetarian, and vegan food products."
"Further, Peazazz has exceptional solubility, making it extremely versatile. In contrast to the major animal-based and plant-based proteins, pea protein is hypoallergenic. Beyond these amazing properties, Peazazz is more environmentally sustainable compared to other protein sources. This is due to the pea plant's unique ability to draw in nitrogen from the atmosphere and store it in their roots. These properties allow producers to use less fertilizer when replenishing the soil, making peas a desired and more sustainable crop."
"The market opportunities we see ahead are supported by the award-winning value proposition of our patented and proprietary protein technology, as well as the extraordinary quality of the potential customers and potential partners with whom we are currently engaged. Between ADM's efforts with CLARISOY and our Peazazz partnership discussions, we continue to see fiscal 2014 coming into focus as the year Burcon emerges from its development stage and begins the commercial phase of its growth."
Fiscal 2014 Second Quarter Financial Results (In Canadian Dollars)
Revenues totaled $23,500 in the second fiscal quarter of 2014, as compared to $23,900 in the prior quarter, and none in the same year-ago quarter. Revenues were derived from deferred royalty payments from ADM for CLARISOY that were recognized in the quarter.
While ADM reported its first commercial sale of CLARISOY from its semi-works facility in December 2012, suggesting CLARISOY commercialization would expand in calendar 2013, the subsequent royalty revenues from CLARISOY sales have been marginal due to lengthy product development cycles typical of major brands in the food and beverage industry.
Research and development expenses in the second fiscal quarter of 2014 were $589,000, compared to $617,000 in the prior quarter and $588,000 in the same year-ago quarter.
General and administrative (G&A) expenses in the second fiscal quarter of 2014 increased to $1.1 million from $1.0 million in the prior quarter and $775,000 in the year-ago quarter. The increase in G&A expenses over the year-ago quarter was primarily due to an increase of $234,000 in patent related activity as well as the launch of Peazazz at the IFT Food Expo.
Net loss in the second fiscal quarter of 2014 totaled $1.6 million or $(0.05) per basic and diluted share, which was virtually unchanged from the prior quarter and compares to a net loss of $1.4 million or $(0.05) per basic and diluted share the same year-ago quarter.
At September 30, 2013, cash and short-term investments totaled $4.0 million, as compared to $6.7 million at March 31, 2013. Management believes the company has sufficient resources to fund its expected level of operations and working capital requirements until at least April 2014. This estimate does not take into account potential proceeds from outstanding convertible securities, royalty revenues from the sale of CLARISOY soy protein or the commercialization of Peazazz.
