VANCOUVER, June 22, 2011 /CNW/ -- VANCOUVER, June 22, 2011 /CNW/ -
Burcon NutraScience Corporation (TSX - BU) ("Burcon") today
reported financial results for the fiscal year ended March 31, 2011
and provided a review of the year's operations. A summary of the
highlights of the past year includes: -- Received a no objection
letter from the U.S. Food and Drug Administration (FDA) that
Puratein(®) and Supertein(™) are GRAS (Generally Recognized As
Safe) under their intended conditions of use; -- Held discussions,
supported due diligence activities, and negotiated possible
business structures with a short list of potential strategic
alliance partners for the commercialization of CLARISOY(® )soy
protein; -- Entered into a License and Production Agreement with
ADM for the worldwide production, marketing and sale of Burcon's
CLARISOY(®) soy protein; -- Filed several patent applications over
newly developed novel processes for the production, functional and
nutritional applications of, and functional attributes of
CLARISOY(®) soy protein; -- Granted 13 U.S. patents over Burcon's
canola and flax protein patent applications; -- Raised $1,867,000
through the exercise of incentive stock options and agents'
compensation options. Since the announcement of CLARISOY(®), Burcon
has undertaken numerous activities in the pursuit of establishing a
strategic alliance for the commercialization of CLARISOY(®) soy
protein. Over the past year, Burcon held numerous discussions
and negotiations with a short-list of global companies for the
commercialization of CLARISOY(®).( )The process of
pursuing a strategic alliance partner or partners for the
development of Burcon's CLARISOY(® )soy protein was focused on
partnering for both the production of CLARISOY(®) as well as the
marketing and sale of CLARISOY(®) to food and beverage
manufacturers. In November 2010, Burcon announced that it had
signed a letter of intent with ADM to license its CLARISOY(®)
technology. In March 2011, Burcon and ADM entered into a
definitive license and production agreement for the worldwide
production, marketing and sale of Burcon's CLARISOY(®) soy
protein. The license agreement provides ADM with the
exclusive rights across all geographic regions and all potential
product applications to produce, market and sell CLARISOY(®) soy
protein. ADM will make royalty payments to Burcon on the
sales of CLARISOY(®) under the twenty-year license agreement.
The maintenance of the CLARISOY(®) soy protein patent portfolio
during the term of the license agreement will be responsibility of
Burcon. In August 2010, Burcon announced that the U.S. FDA issued a
no objection letter with respect to Puratein(®) and Supertein™
canola protein isolates. This response indicates that the FDA
has no objection to the conclusion that Puratein(®) and Supertein™
are generally recognized as safe among qualified experts for use
alone or together as an ingredient in dairy products, grain
products, fruit and vegetable juices and beverages, salad
dressings, meal replacements, and nutritional bars. Based on
the information provided, as well as other information available to
the FDA, the FDA responded that it has no questions at this time
regarding the conclusion that Puratein(®) and Supertein™ are GRAS
under their intended conditions of use. Puratein(®) and
Supertein™ are therefore considered to be GRAS-Notified. Concurrent
with the announcement of the license and production agreement with
ADM for CLARISOY(®), Burcon also announced that it had amended the
license and development agreement (the Canola Agreement) with ADM
to provide an extended development period for continued research
aimed at expanding the commercial value of Puratein(®) and
Supertein™. The development period has been extended to March
1, 2012 to facilitate continued research on the commercialization
potential, particularly with respect to their unique functional and
nutritional characteristics. As part of the amendment, Burcon
has agreed to reimburse ADM for its share of the regulatory
recognition costs for Puratein(®) and Supertein™ of US$360,000
(C$356,000). Subsequent to the year-end, the funds were
deposited into an escrow account held in trust for Burcon and ADM
until March 1, 2012. On March 1, 2012, the funds held in the
escrow account, including any accrued interest, will be released to
ADM, and upon receipt, all intellectual property, reports, studies
or other materials prepared by ADM, Burcon or by a third party in
connection with the GRAS process will be deemed to be owned solely
by Burcon and ADM will have no further rights with respect
thereto. Unless Burcon and ADM come to any other agreements,
the Canola Agreement will terminate on March 1, 2012. For the
coming year, Burcon's objectives are to further the development and
commercialization of its soy and canola products. CLARISOY(® )
Burcon intends to conduct further research and development to
improve or develop novel applications for CLARISOY(®) soy protein
into food products. Burcon also will support ADM in
connection with its development of a commercial facility for the
production, marketing and sale of CLARISOY(®) soy protein.
Puratein(®) and Supertein(™) Burcon plans to conduct further
research and development to establish the unique functional and
nutritional characteristics of Supertein(™) and Puratein(®) canola
protein isolates and also initiate scientific research projects
aimed at establishing the potential health benefits of Supertein(™)
canola protein isolate and its use as a functional food
ingredient. Burcon's ultimate objective from its canola
research activities is to develop Puratein(®) and Supertein(™)
through one or more strategic alliances to pursue the development
and construction of a first commercial facility. Burcon will
continue to refine its protein extraction and purification
technologies and to 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 $8,433,451 ($0.29 per share)
for the year as compared to $6,660,322 ($0.24 per share) in the
prior year. Included in the loss amount reported is
stock-based compensation (non-cash) costs of $3,718,096 (2010 -
$2,649,297). The other non-cash costs included in the loss
for the year are amortization of $178,050 (2010 - $163,969) and
loss on disposal of property and equipment of $nil (2010 - $924).
Research and development (R&D) expenses increased by
approximately $663,000 from fiscal 2010. In March 2011,
Burcon determined that it had met all the criteria of deferring
development costs with respect to CLARISOY(®) and has accordingly
capitalized $202,000 to development costs. As noted above,
Burcon has recorded in R&D expenses $356,000 that it has agreed
to reimburse ADM for its share of regulatory recognition costs for
Supertein(™) and Puratein(®). There were no other significant
changes in R&D expenditures for the year. General and
administrative expenses increased by about $745,000 over the prior
year. Included in salaries and benefits is stock-based
compensation expense of approximately $2,636,000 (2010
-$1,928,000). Options granted to directors in the third
quarter of fiscal 2010 vested immediately and a related fair value
of about $1,059,000 was recorded as stock-based compensation.
The full-year effect of the options granted at the same time to
employees contributed to an increase of stock-based compensation of
about $1,416,000. Options granted to directors this year, of
which some were vested immediately, also contributed to
approximately $645,000 of the increase, offset by about $287,000 of
stock-based compensation expense from options that completed
vesting in the first quarter. The cash portion of salaries
and benefits increased by about $174,000 over last year due to two
of the Company's officers having transferred their employment to
Burcon during the year which resulted in an increase in salaries
and benefits of about $112,000. The balance of the increase
is attributable to the hiring of a business development analyst
late last year, as well as an increase in directors' fees due to
the appointment of new independent directors and additional
committee meetings held during the year. Included in investor
relations expenses is approximately $125,000 (2010 - $104,000) of
stock-based compensation expense. The cash portion of
investor relations expense increased by approximately
$40,000. Fees and travel expenses paid to U.S. and
Canadian investor and public relations consultants contributed
about $46,000 to the increase, as well as expenses for a
newly-designed website of about $32,000, offset by a decrease in
annual report and video expenditures of about $18,000. 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,
several patents entered National Phase, in particular during the
last quarter that resulted in significant filing fees in several
countries. During the previous year, Burcon filed several new
patent applications relating to CLARISOY(®)( )soy protein isolate
and also incurred higher foreign agency fees for the registration
in various European countries of patents granted in Europe and also
for a patent that entered national phase in the fourth quarter that
resulted in significant filing fees in various countries.
From inception, Burcon has expended approximately $5.8 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. At March 31, 2011, the Company's
cash and short-term investment totaled approximately $11,932,000,
as compared to approximately $13,982,000 at March 31, 2010.
During this year, Burcon received proceeds of $1.9 million from
option and agents' warrant exercises. Management believes it
has sufficient resources to fund its expected level of operations
and working capital requirements to at least January 2013,
excluding proceeds from outstanding convertible securities. 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 are developing
Puratein(®) and Supertein(™ )canola protein isolates with unique
functional and nutritional attributes, and CLARISOY(®), a
revolutionary soy protein which is 100% soluble and completely
transparent in acidic solutions. Our team of highly specialized
scientists and engineers work from our own research facility to
develop and optimize environmentally sound technologies. To-date,
our patent portfolio consists of 164 issued patents in various
countries, including 27 issued U.S. patents, and in excess of 275
additional pending patent applications, 70 of which are U.S. patent
applications. ON BEHALF OF THE BOARD OF DIRECTORS "Johann F.
Tergesen" Johann F. Tergesen President and Chief Operating Officer
Burcon NutraScience Corporation is a publicly listed on the Toronto
Stock Exchange under the symbol "BU". For more information on
Burcon, visit www.burcon.ca. 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. Burcon NutraScience Corporation Consolidated Balance
Sheets As at March 31, 2011 and 2010 2011 2010 $ $ Assets Current
assets Cash and cash equivalents 9,628,020 11,661,745 Short-term
investments 2,304,465 2,320,372 Amounts receivable 41,919 25,052
Prepaid expenses 81,570 109,566 12,055,974 14,116,735 Property and
equipment 732,977 749,455 Deferred development costs, net of
accumulated amortization of $nil (2010 - $nil) 201,500 - Goodwill
1,254,930 1,254,930 14,245,381 16,121,120 Liabilities Current
liabilities Accounts payable and accrued liabilities 1,328,920
401,179 Shareholders' Equity Capital stock 47,158,758 44,236,390
Contributed surplus 3,762,983 3,762,983 Options 8,115,843 5,236,268
Warrants - 171,972 Deficit (46,121,123) (37,687,672) 12,916,461
15,719,941 14,245,381 16,121,120 Burcon NutraScience
Corporation Consolidated Statements of Operations, Comprehensive
Loss, and Deficit For the years ended March 31, 2011 and 2010 2011
2010 $ $ Expenses General and administrative 3,922,482 3,177,036
Research and development 2,764,045 2,101,159 Professional fees
1,716,424 1,296,863 Management fees and services 165,563 169,496
Amortization of property and equipment 3,667 3,379 Loss from
operations (8,572,181) (6,747,933) Interest and other income
138,730 87,611 Loss and comprehensive loss for the year (8,433,451)
(6,660,322) Deficit - Beginning of year (37,687,672) (31,027,350)
Deficit - End of year (46,121,123) (37,687,672) Basic and diluted
loss per share (0.29) (0.24) Burcon NutraScience Corporation
Consolidated Statements of Cash Flows For the years ended March 31,
2011 and 2010 2011 2010 $ $ Cash flows from operating activities
Loss for the year (8,433,451) (6,660,322) Items not affecting cash
Amortizaion of property and equipment 178,050 163,969 Loss on
disposal of property and equipment - 924 Stock-based compensation
expense 3,718,096 2,649,297 (4,537,305) (3,846,132) Changes in
non-cash working capital items Amounts receivable (16,867) 10,569
Prepaid expenses (3,634) (23,542) Accounts payable and accrued
liabilities 927,741 54,449 (3,630,065) (3,804,656) Cash flows from
investing activities Decrease (increase) in short-term investments
15,907 (2,320,372) Acquisition of property and equipment (180,608)
(288,503) Development costs deferred (105,852) - Proceeds from
disposal of property and equipment - 828 (270,553) (2,608,047) Cash
flows from financing activities Issue of capital stock - net of
issue costs 1,866,893 15,832,472 (Decrease) increase in cash and
cash equivalents (2,033,725) 9,419,769 Cash and cash equivalents -
Beginning of year 11,661,745 2,241,976 Cash and cash equivalents -
End of year 9,628,020 11,661,745 Cash and cash equivalents consist
of Cash 531,516 61,554 Cash equivalents 9,096,504 11,600,191
9,628,020 11,661,745 Supplemental disclosure of non-cash investing
activities Charged to deferred development costs: Stock-based
compensation 76,613 - Amortization of property and equipment 19,036
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align="center" Jade Cheng, Chief Financial Officerbr/ Burcon
NutraScience Corporationbr/ (604) 733-0896 / (888) 408-7960
toll-freebr/ a
href="mailto:jcheng@burcon.ca"jcheng@burcon.ca/a a
href="http://www.burcon.ca"www.burcon.ca/a /p
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