Burcon Reports Fiscal 2013 Third Quarter Results

VANCOUVER, British Columbia, Feb. 14, 2013 (GLOBE NEWSWIRE) -- Burcon NutraScience Corporation (TSX:BU) (Nasdaq:BUR) ("Burcon") today 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.

Financial Review

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.