VANCOUVER, Nov. 15 /CNW/ - Burcon NutraScience Corporation (TSXV - BU) ("Burcon") today reported financial results for the three and six months ended September 30, 2004.
During the first quarter, Burcon dedicated its efforts to producing and providing samples to its alliance partner, Archer Daniels Midland (ADM), needed for applications work and toxicology studies. The samples for toxicology studies were completed and delivered in June 2004. Burcon continued its work on producing samples for applications work into the early part of the second quarter. During the second quarter, Burcon announced that, in conjunction with ADM, it would pursue modifications to its protein extraction process in an effort to improve certain physical and functional properties of Puratein(R) and Supertein(TM) to allow for a broader array of applications.
This may create a delay in the regulatory recognition process. If Burcon and ADM conclude that substantial modifications needed to be made to the extraction process in order to expand potential applications of Puratein and Supertein, then samples will have to be prepared using the modified process. Such samples are required for toxicology studies which form an important part of the Generally Recognized as Safe (GRAS) notification dossier and the regulatory recognition process.
During the second quarter, Burcon announced that the results from the external bio-functionality study indicated that Puratein and Supertein's effect on bile acid binding were not statistically different from that of soy protein isolate. However, Burcon's proteins showed significant radical scavenging activity which could indicate that Burcon's protein products may have effective anti-oxidative potential in vivo. Correlation between these
results and the activity in vivo will need to be undertaken.
Financial Results and Highlights
Burcon reported a net loss of $912,598 ($0.05 per share) and $1,838,230 ($0.10 per share) for the three and six months ended September 30, 2004, respectively, as compared to $622,374 ($0.04 per share) and $1,244,362 ($0.08 per share) for the comparative periods in fiscal 2004.
Research and development expenses amounted to $457,021 and $821,786 for the current quarter and six-month period, respectively, compared with $311,169 and $648,281 in the same comparable periods last year. The increase is attributed primarily to stock-based compensation expense (a non-cash expense), external research expenses related to a bio-functionality study and a loss on disposal of equipment.
General and administrative expenses amounted to $257,440 and $593,911 for the current quarter and six-month period, respectively, compared with $176,509 and $333,737 for the comparable periods last year. The increase is due almost entirely to stock-based compensation expense recorded as a result of stock options granted to certain employees and directors during the quarter.
Professional fees amounted to $193,122 and $391,440 for the three and six months ended September 30, 2004, respectively, compared with $108,250 and $215,980 for the same periods last year. The increase is mostly attributed to patent legal fees and disbursements due to several of the Company's patents entering into National Phase during the first and second quarters.
At September 30, 2004, Burcon's cash position amounted to $2,294,560, and its working capital position was $2,070,345. Due to the higher patent filing and maintenance activities, the Company revised its original forecast during the first quarter with respect to patent legal fees and disbursements. Given the revised estimates, Burcon's management believes that it has sufficient resources to fund its expected level of operations and working capital
requirements to September 2005. This estimate excludes potential proceeds from any outstanding stock options or warrants being exercised.
About Burcon NutraScience
Burcon is a research and development company developing a portfolio of composition, application and process patents around its plant protein extraction and purification technology. The goal of Burcon's research is to develop its patented process to utilize inexpensive oilseed meals for the production of purified plant proteins that exhibit valuable nutritional, functional or nutraceutical profiles. Burcon, in conjunction with Archer Daniels Midland, is currently focusing its efforts on developing the world's first commercial canola proteins, Puratein(R) and Supertein(TM). Canola, recognized for its nutritional qualities, is the second-largest oilseed crop in the world after soybeans. Burcon's goal is to develop Puratein and Supertein to participate with soy, dairy and egg proteins in the expanding multi-billion-dollar protein ingredient market, with potential uses in prepared foods, nutritional supplements and personal care products.
The TSX Venture Exchange 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.