Burcon: We’re encouraged by overall market conditions for protein
In a call with investors, Johann Tergesen, President and Chief Operating Officer, Burcon NutraScience, said the company is encouraged by the overall market conditions.
“We’ve seen a torrent of media attention into proteins,” he said, “And a recent report said that foods and drinks making a high protein claim accounted for 19% of global new product launches in 2012.”
The same report – from market analysts Mintel – noted that, after the US, ‘high protein’ positioning is prominent in India (9%) and the UK (7%).
Snacks dominate the category - accounting for 20% of the high protein food and drink new product launches in the US in 2012, followed by meal replacement and other fortified drinks (17%) and spoonable yogurt (15%), said Mintel.
All in all, the global outlook for proteins is very positive, and the company’s first ever revenues were recorded by the Canadian company with the first royalty revenues paid by ADM for the Clarisoy next generation soy protein.
Passing the Clarisoy baton
Tergesen said that Clarisoy is the number one driver of Burcon’s value.
“In December 2012, ADM notified Burcon of the first bona fide arm’s length sale of Clarisoy soy protein,” said the company
“Burcon recorded royalty revenue of about C$7,000, comprising royalty revenue from Clarisoy sales and about C$4,000 of initial license fee payments that were previously deferred. “
Having passed the Clarisoy baton to ADM, the company is now focusing on the development of its Peazazz-branded pea protein.
The company expects to have a Peazazz semi-works production facility online and producing commercial quantities to drive primary market demand in 2013.
When asked about the economics of the proteins compared to whey, Burcon’s senior vice president process, Randy Willardsen, said: “I’m blown away about what these products can do against whey protein isolates.
“We can produce it cheaper and we can sell it at a similar price.”
Financials
Patent legal fees and expenses accounted for a significant portion of Burcon’s professional fees in three and nine months ended December 31, 2012.
“Burcon’s patent strategy is to aggressively seek protection for new technologies as well as further protecting current technologies,” explained the company.
“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.”
With cash and short-term investment of approximately $7.8 million, the company said it has sufficient resources to fund its expected level of operations and working capital requirements to at least May 2014.
