Burcon NutraScience Corporation: Fiscal 2013 Q3 Results
Vancouver, British Columbia — Burcon NutraScience Corporation reported financial results for the three and nine months ended December 31, 2012. All amounts are stated in Canadian dollars unless otherwise noted.
Selected highlights of the third quarter and period subsequent to quarter-end:
· Completed equity offering of $5.75 million, with net proceeds of $5.0 million;
· Announced first commercial sale of CLARISOY™ soy protein by ADM;
· Commenced the building of Peazazz™ pea protein semi-works production facility; and
· Filed several patent applications over novel or alternative processes for the production and functional applications of its plant-based proteins.
In December 2012, ADM notified Burcon of the first bona fide arm’s length sale of CLARISOY™ soy protein. Under the License and Production agreement with ADM, the initial license fee payments cease at the end of the quarter that immediately precedes the quarter in which the first bona fide arm’s length sale of CLARISOY™ occurs; therefore, Burcon was not entitled to the fixed quarterly payment from ADM for the quarter ended December 31, 2012. Burcon recorded royalty revenue of about $7,000, comprising royalty revenue from CLARISOY™ sales and about $4,000 of initial license fee payments that were previously deferred.
General and administrative expenses decreased by about $274,000 over the same quarter last year. Included in salaries and benefits is stock-based compensation expense of approximately $513,000 (2011 –$722,000). Burcon recorded about $481,000 of stock-based compensation expense for options granted to directors this quarter that vested. Similarly, Burcon recorded about $540,000 in stock-based compensation expenses for options granted to directors in the comparative quarter that also vested immediately.
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 quarter, Burcon expensed about $266,000 (2011 - $181,000, net of $179,000 capitalized to deferred development costs) of patent costs. Total patent legal fees and expenditures (before capitalization) decreased by about $94,000 over the prior period. More than one-half of the decrease is attributable to more patents that entered national phase in this quarter last year, which generated significant filing fees in various countries. The balance of the decrease is due to lower patent maintenance costs this quarter as Burcon is deferring annuity payments for certain non-core patents and applications. From inception, Burcon has expended approximately $8.4 million on patent legal fees and disbursements to strengthen its patent portfolio in various countries of the world and for filing patent applications for new inventions.
Investor relations expenses decreased by approximately $64,000, due mainly to a decrease in U.S. public relations and investor relations costs of about $40,000, as well as travel costs related to the NASDAQ listing in October 2011 of about $15,000.
Research and development expenses increased by about $124,000 over the comparative quarter. Of the increase, about $133,000 related to the amortization of deferred development costs that began in the second quarter of this year. During this quarter last year, Burcon deferred a total of $145,000 of CLARISOY™ development costs to deferred development costs.
At December 31, 2012, the Company’s cash and short-term investment totaled approximately $7.8 million, as compared to approximately $6.2 million at March 31, 2012. Management believes it has sufficient resources to fund its expected level of operations and working capital requirements to at least May 2014. This estimate excludes any proceeds from outstanding convertible securities and royalty revenues from ADM that may be derived from sales of CLARISOY™ soy protein.
Burcon had 31,624,693 common shares issued and outstanding as at December 31, 2012.
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™ soy protein, which offers clarity and complete protein nutrition for low pH beverage systems; Peazazz™a uniquely soluble and clean-tasting pea protein and Puratein®, Supertein™ and Nutratein™ 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 218 issued patents in various countries, including 36 issued U.S. patents, and in excess of 400 additional pending patent applications, 81 of which are U.S. patent applications.
For more information, please contact:
Michael Kirwan, Director, Corporate Development
Burcon NutraScience Corporation
(604) 733-0896 / (888) 408-7960 toll-free