(Disclosure: The following represents my opinions only. I am not receiving any compensation for writing this article, nor does Hydra Capital have any business relationship with companies mentioned in this post. I am long BU.TO)
Some Clarity on CLARISOY for Burcon
Burcon provided a brief update on ADM's progress with its commercial-scale CLARISOY soy protein production plant in Illinois this morning before market open. The text from the press release is copied and pasted below (link to the news HERE).
Burcon has tested the patience of almost anyone familiar with the company and its royalty agreement with Archer Daniels Midland (ADM) -- one of the world's largest food ingredient providers. It has long been expected that ADM will leverage CLARISOY through its multi-billion dollar WILD Flavors acquisition that was completed in Q4 2014. Details regarding the specifics of the royalty agreement are not public, but I have seen price targets in the $6-10 range from analysts who cover the stock based on "industry" royalty guidelines. I also came across an article recently which suggested that ADM is also working on a protein factory in Brazil... whether or not that plant would also produce CLARISOY is not immediately clear, though the article seems to suggest that it is a possibility (the article requires translation, but can be found HERE). Burcon is up 17.5% as I write this and I'm hopeful that the market will start to get clarity on the value of the CLARISOY royalty over the next couple of quarters...
First Large-Scale CLARISOY™ Production Facility Scheduled to be Commissioned in Fourth QuarterVANCOUVER, British Columbia, Sept. 06, 2016 (GLOBE NEWSWIRE) -- Burcon NutraScience Corporation (BU.TO) (BUR) (“Burcon”) announced today that, Archer Daniels Midland Company (ADM), Burcon’s license and production partner for CLARISOY soy protein, has confirmed plans to achieve full commercial production of CLARISOY this year. ADM plans to begin commissioning the first large-scale CLARISOY production facility at its North American headquarters in Decatur, Illinois, during the fourth quarter of 2016.
“This is a truly significant milestone in the commercialization of CLARISOY,” said Johann Tergesen, Burcon’s president and chief operating officer, adding, “ADM is committing considerable resources to commercializing CLARISOY and is the ideal partner for such innovative proteins. ADM’s line of CLARISOY soy proteins is truly on-trend to meet the demand by consumers for great-tasting, nutritionally enhanced products targeted to the ever growing number of health and wellness-minded consumers.”
For more than a century, the people of Archer Daniels Midland Company (ADM) have transformed crops into products that serve the vital needs of a growing world. Today, we’re one of the world’s largest agricultural processors and food ingredient providers, with more than 32,300 employees serving customers in more than 160 countries. With a global value chain that includes 428 crop procurement locations, 280 ingredient manufacturing facilities, 39 innovation centers and the world’s premier crop transportation network, we connect the harvest to the home, making products for food, animal feed, industrial and energy uses.
About Burcon NutraScience Corporation
Burcon NutraScience is a leader in developing functionally and nutritionally valuable plant- based proteins. The company has developed a portfolio of composition, application, and process patents originating from a core protein extraction and purification technology.
Burcon’s CLARISOY™ soy protein offers clarity and high-quality protein nutrition for low pH beverage systems and excellent solubility and exceptionally clean flavor at any pH; Peazazz® is a uniquely soluble and clean-tasting pea protein; and Puratein®, Supertein® and Nutratein® are canola protein isolates with unique functional and nutritional attributes. For more information about the company, visit www.burcon.ca.
The TSX 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 or forward-looking information within the meaning of the U.S. Private Securities Litigation Reform Act of 1995 and applicable Canadian securities legislation. Forward-looking statements or forward-looking information involve risks, uncertainties and other factors that could cause actual results, performances, prospects and opportunities to differ materially from those expressed or implied by such forward-looking statements. Forward- looking statements or forward-looking information can be identified by words such as “anticipate,” “intend,” “plan,” “goal,” “project,” “estimate,” “expect,” “believe”, “future,” “likely,” “may,” “should,” “could”, “will” and similar references to future periods. All statements other than statements of historical fact included in this release are forward-looking statements, including, without limitation, intentions and plans contained in this press release. There can be no assurance that such statements will prove to be accurate and actual results and future events could differ materially from those anticipated in such statements or information. Important factors that could cause actual results to differ materially from Burcon’s plans and expectations include the actual results of business negotiations, marketing activities, adverse general economic, market or business conditions, regulatory changes and other risks and factors detailed herein and from time to time in the filings made by Burcon with securities regulators and stock exchanges, including in the section entitled “Risk Factors” in Burcon’s annual information form dated June 27, 2016 filed with the Canadian securities administrators on www.sedar.com and contained in Burcon’s 20-F filed with the U.S. Securities and Exchange Commission on www.sec.gov. Any forward-looking statement or information only speaks as of the date on which it was made and, except as may be required by applicable securities laws, Burcon disclaims any intent or obligation to update any forward-looking statement, whether as a result of new information, future events or otherwise. Although Burcon believes that the assumptions inherent in the forward-looking statements are reasonable, forward-looking statements are not guarantees of future performance, and accordingly, investors should not rely on such statements.
News release pasted below