Burcon rights offering to raise further R&D funds

By Jess Hallliday

- Last updated on GMT

Related tags Burcon Protein Amino acid Soy protein

Burcon Nutrascience Corporation has been granted the go-ahead to
conduct a share offering by way of a rights offering, which is
expected to raise up to C$5m towards the continuing R&D and
general working capital.

The Canadian company, which holds a portfolio of patents around its plant protein extraction and purification technology, will offer to each shareholder of record on August 10 one right for each common share held. Ten rights will entitle the holder to purchase one common share at a price of $2.30.

Burcon's main research efforts are currently focused on developing the world's first canola protein products in collaboration with ADM. It aims to make its Puratein and Supertein protein isolates viable alternatives to soy, dairy and egg proteins with uses in prepared foods, supplements and personal care.

A standby guarantee that a minimum of 1,095,884 will be issued under the offering is provided by ITC Corporation, E-Concept and I-Global.

Burcon reported its full year results earlier this month. Its R&D spend for the year was $1.3m, resulting in a loss of $2.8m. Prior to commercialisation Burcon does not presently have a revenue stream through sales, but just prior to the close of the first quarter it raised $2.3m in another rights offering.

In Q3, the company made announcements concerning exercise of outstanding warrants, adding $1.24m to its coffers.

The fund-raising has yielded results - indeed, the last year has been landmark in bringing Puratein and Supertein closer to commercialisation. After completing technological modifications to make the proteins suitable for a wider range of foodstuffs, in Q3 Burcon announced that it was turning its attention to scaling up production to yield sufficient quantities of material to enable scientific studies, that will make it possible to apply for GRAS (generally recognised as safe) status in the US.

"Through all of these activities, Burcon will continue to expand on the economic potential of its core technology and novel protein,"​ it said.

Burcon was recently granted two US patents for its technology, relating to its novel process for extracting and purifying protein from canola and rapeseed, and on the functional attributes of its canola protein isolates.

Last October it was envisaged that the Supertein and Puratein will reach the market by mid-2007.

The road thus far has certainly been long: Burcon bought the technology in 1999 from BMW Canola, which had already been working on it since 1990.

Canola is the world's second largest oilseed crop after soybeans. It possesses a high level of protein purity without prohibitive fat levels and an amino acid content comparable to animal proteins and superior to that of soy proteins.

Its high protein efficiency ratio - the measure of a growing animal's total weight gain versus the weight of protein consumed during the growing period - is, according to Burcon, more than double that of soy.

Both proteins are suitable for use in protein bars and beverages, but Supertein boasts very high solubility in neutral and acidic environments, making it ideal for use in products like cookies and muffins, donuts and meringues.

Puratein has the ability to emulsify and projected uses include vegetable burgers, battered fried goods, mayonnaise, glazes and gels.

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