Burcon NutraScience Stock

Burcon NutraScience Corporation (Burcon) operates as a research and development company. The company has developed plant protein extraction and purification technology in the field of functional, renewable plant proteins. The company has an extensive portfolio of composition, application and process patents covering novel plant-based proteins derived from pea, canola, soy, hemp, sunflower seed and more.

Pea

Pea proteins available in the market are sold for use in a variety of food products, including meat alternatives; snacks and cereals; diet products (high protein foods); ready-to-mix and ready-to-drink beverages, as well as in nutritional supplements, such as meal replacement shakes.

Since the development in 2011 of its novel technology to produce its Peazazz pea protein, Burcon has built a semi-works production facility in Winnipeg, Manitoba, to produce Peazazz pea protein at a small commercial scale in order to provide market development quantities to customers for product and market development activities. In 2013, Burcon officially launched and demonstrated two unique Peazazz pea protein products at the 2013 IFT Expo. The launch was successful to initiate interest from potential strategic partners. During fiscal 2014 to fiscal 2019, Burcon shipped samples of Peazazz pea protein to various key potential multi-national production and/or distribution partners and undertook applications work in response to requests from certain potential commercialization partners.

In 2019, Burcon announced that it had received a GRAS (Generally Recognized As Safe) no-objection letter from the United States Food and Drug Administration (FDA) for its Peazazz and Peazac pea proteins. Burcon had successfully obtained self-affirmed GRAS status for its Peazazz and Peazac pea protein products and had made its submission to the FDA for GRAS notification in 2018.

In January 2020, Burcon announced that Burcon, Merit Foods and Société des Produits Nestlé, SA (Nestle) entered into a joint development agreement for the development and use of Burcon's novel protein ingredients, including pea and canola proteins, into Nestle's food and beverage products. Nestle is the largest food company in the world and the agreement was designed to provide Nestle with access to Burcon's unique expertise and a new range of high-quality plant-based protein ingredients. During fiscal year 2021, Burcon conducted research work for and provided Nestle with various samples for testing and analysis.

In May 2020, Burcon announced that its joint venture company, Merit Functional Foods Corporation (Merit Foods) was expanding production capacity at its state-of-the-art protein production facility in Winnipeg, Manitoba. In February 2021, Burcon announced that Merit Foods had completed the first commercial production runs of its Peazazz and Peazac pea proteins. Subsequently on April 12, 2021, Burcon announced that Merit Foods had achieved first commercial production of its novel lineup of Puratein canola proteins. Merit Foods' product portfolio consists of three product family offerings, such as pea protein, non- genetically modified organism (GMO) canola protein, and MeritPro, a unique lineup of nutritionally complete protein blends. Its entire portfolio aligns with a number of consumer label preferences, including allergen-free, gluten-free, non-dairy, non-GMO, and vegan.

Canola

Burcon's technologies allow it to extract and purify three types of canola proteins from canola meal, a co-product (together with canola oil) of the canola seed crushing industry. Burcon has branded these canola proteins under the trade names Puratein, Supertein and Nutratein.

Merit Foods has re-branded Burcon's Nutratein, Puratein and Supertein canola protein ingredients as Puratein C, Puratein G and Puratein HS, respectively. Merit Foods markets its novel lineup of Puratein canola protein ingredients as having a neutral flavour profile that offers excellent solubility and stability across a range of pH levels. Merit Foods' facility is the first and only commercial-scale facility in the world capable of producing food-grade protein from canola, the world's second-largest oilseed crop.

Pea Protein/Canola Protein Blends

Burcon's pea protein products can be combined with Burcon's canola protein products to provide proprietary protein blend products with excellent functional attributes and added nutritional value. The resulting blends, marketed as Nutratein blend products, are proprietary plant protein products providing improved protein nutrition.

In May 2019, Burcon announced the development of the pea protein and canola protein blends Nutratein-PS and Nutratein-TZ. These blended products have exceptional functional characteristics and nutritional value. Nutratein-PS is a blend of Peazazz pea protein and Supertein canola protein, having clean flavour and high solubility, intended for use in products, such as dairy alternative beverages. Nutratein-TZ is a blend of Peazac pea protein and Puratein canola protein, having functional properties that make it ideally suited for use in plant-based meat alternative products, such as plant-based burgers or sausages.

As part of the Amended and Restated License Agreement, Merit Foods will be responsible for the production, marketing and sales of Burcon's pea, canola and its proprietary Nutratein protein blends. Merit Foods has since re-branded Burcon's pea and canola protein blends as its lineup of unique MeritPro protein blends. Due to the particular needs of each application, Merit Foods is able to tailor the color, functionality and nutrition of its MeritPro blends based on the specific application.

Soy

Soy protein isolate is used as a functional ingredient or fortifier in a wide variety of food products, including meat alternatives, dairy alternatives, protein shakes, ready-to-drink beverages, protein cereal bars, soups and sauces, meats and meat alternatives, and breads and baked goods. In addition to enhancing the protein content of foods, soy protein isolates are used by food manufacturers for their functional applications. These applications include the ability to emulsify, whip, bind and add viscosity to foods.

Burcon has developed technologies to extract and purify soy protein from a variety of soy materials. These technologies encompass various processes to produce a soy protein, which Burcon has branded as CLARISOY. A number of different processes are used to produce CLARISOY soy protein specific for certain applications ranging from soluble and transparent beverages with a pH of 4.0 and below to neutral beverages with a pH of 7.0 or higher. CLARISOY is specifically designed to enable beverage manufacturers to meet the demand for great-tasting, nutritionally enhanced beverages targeted to the ever-growing number of health and wellness minded consumers. Potential applications for CLARISOY include sports nutrition beverages, citrus-based drinks, fruit-flavoured beverages, lemonades, powdered beverage mixes and in numerous non-beverage plant-based applications.

In 2011, Burcon, Burcon Nutrascience (MB) Corp. (Burcon-MB) and Archer-Daniels-Midland Company (ADM) entered into the ADM License and Production Agreement for the worldwide, exclusive production, marketing and sale by ADM of soy protein products using Burcon's CLARISOY soy protein technology.

By June 2012, ADM had constructed and was operating a commercial-scale production plant in Decatur, Illinois to produce CLARISOY soy proteins. ADM conducted the first commercial sale of CLARISOY soy protein by December 2012.

Since the initial launch of CLARISOY in 2012, ADM launched further extensions of the CLARISOY product line at the Institute of Food Technologists Annual Meeting and Food Expo (IFT Expo). In addition, ADM showcased unique prototype products, such as protein smoothies, non-dairy Greek yogurt, cold-brewed coffee and coffee creamer, where CLARISOY soy protein was either used as the sole protein source or the primary protein source in the product.

ADM launched a plant-based energy drink made with CLARISOY. Customers who were looking for plant-based protein ingredients to formulate plant-based or non-dairy products will find CLARISOY to be an attractive protein source. CLARISOY is suitable for high protein fortification products, such as meal replacements and sport nutrition smoothies. CLARISOY is also suitable for casual wellness products that require a bit of protein boost.

Specialty Proteins and Phytochemical Extractions

Burcon's extraction and purification technologies can also be used to produce specialty proteins, such as flax and hemp proteins. Burcon's core extraction and purification technology is versatile and can be adapted to process a range of oilseed and non-oilseed meals to produce high-value protein products for use in the food and beverage industries.

In February 2018, Burcon applied for accreditation from Health Canada's Office of Controlled Substances to conduct research for the future commercial production of purified cannabinoid extracts. Burcon received its research license from Health Canada on July 17, 2019.

Pea

In November 2011, Burcon announced that it had developed a novel pea protein, which it has branded as Peazazz, its first technology platform to extract added-value proteins from a non-oilseed source. Burcon's technology extracts and purifies a novel pea protein from field peas. Both the nutritional and functional characteristics of pea protein allow for a host of great tasting food and beverage product applications, as well as for use in nutritional supplements.

Pea proteins available in the market are sold for use in a variety of food products, including meat alternatives; snacks and cereals; diet products (high protein foods); ready-to-mix and ready-to-drink beverages; and in nutritional supplements, such as meal replacement shakes.

Peazazz

Peazazz pea protein is a uniquely soluble, clean and neutral-tasting pea protein that is suitable for dairy alternative food and beverages. Peazazz is the purest pea protein on the market, has clean flavour characteristics; and is well suited for use in plant-based milk, yogurt, and ice cream, as well as a variety of other healthy and great tasting food and beverage product applications. Its nutritional and functional characteristics make Peazazz an attractive product to companies looking for an alternative plant protein ingredient.

Pea is a widely accepted and consumed vegetable, recognized for its nutritional value and health benefits. Burcon has successfully extracted added-value proteins that contain essential amino acids into a white powder that can be incorporated into a variety of foods and beverages, including meat alternative products, dairy alternative products, dry-blended beverages, ready-to-drink beverages, nutrition bars and crisps, weight management and meal replacement products, and plant-based foods.

Burcon's Peazazz pea protein can be produced from a non-GMO source and pea protein is not considered a major allergen. Burcon's Peazazz pea protein is dairy-free, soy-free, gluten-free, allergen and GMO-free and does not require allergen labelling.

Burcon is not aware of any pea protein isolate in the market that is clean-tasting with superior solubility like Peazazz. Burcon expects the introduction of Peazazz pea protein to be able to gain a share of the pea protein market, as well as expand the pea protein market to include a broader range of product applications.

In 2013, Burcon officially launched Peazazz pea protein at the 2013 IFT Expo. Burcon demonstrated two products, Peach Mango Rhythm, made from 30% real juice, with all natural flavors and containing five grams of Peazazz pea protein per 250ml serving; and Vanilla Jazz, a neutral pH milk-style beverage with a faint hint of vanilla flavoring, fortified with vitamins and minerals and five grams of Peazazz pea protein per 250ml serving.

Peazac and Peazac 850

Peazac pea protein is a co-product of the production of Peazazz pea protein. Extracted pea proteins are fractionated under conditions that give rise to two product streams, which are separately further processed to provide Peazazz and Peazac. The properties of Peazac differ from those of Peazazz, including a lower protein content in Peazac. Merit Foods has introduced a new version of Peazac, which it has branded as Peazac 850, targeted at formulators developing products with a creamier and smoother mouthfeel. Peazac 850 has a protein content of 85% and has exceptional taste and functionality. Recommended food applications for the Peazac line of pea proteins include plant-based meat alternative products, ready-to-mix powders, ready-to-mix beverages, dairy alternatives, nutrition bars, and applications requiring the most neutral flavour and moderate viscosity. Like Peazazz pea protein, Peazac pea protein is dairy-free, soy-free, gluten-free, GMO-free and does not require allergen labelling.

Pea Protein Production

Pursuant to the terms of the Amended and Restated License Agreement, Burcon has licensed its Peazazz pea protein and its canola protein technologies to Merit Foods, on an exclusive basis, to use, market and sell the products that use the pea and canola technologies. Under the Amended and Restated Licence Agreement, Merit Foods is the primary party responsible for the commercialization efforts for Burcon's pea and canola protein products, including developing the necessary process engineering for scaling up the production of the pea and canola products; developing applications for the pea and canola products; and designing, building and commissioning an initial production facility to manufacture the pea and canola products.

Canola

At the core of Burcon's canola protein production process is a micelle formation step, which separates the two naturally occurring proteins in canola, napin and cruciferin. Processing of these two fractions results in the cruciferin-rich canola protein isolate Puratein canola protein and the napin-rich canola protein isolate Supertein canola protein. Burcon has also developed Nutratein canola protein, which consists of a blend of the two fractions. Merit Foods has re-branded Burcon's Nutratein, Puratein and Supertein canola protein ingredients as Puratein C, Puratein G and Puratein HS, respectively. In April 2021, Burcon announced that Merit Foods has achieved first commercial production of its novel lineup of Puratein canola proteins.

Canola Protein

Burcon's canola protein has a score in the range of 0.60 to 0.90 under the 1989 FAO/WHO pattern and a score in the range of 0.72 - 1.00 under the 2002 the Food and Agricultural Organization (FAO)/ World Health Organization (WHO)/United Nations University (UNU) pattern, suggesting that Burcon's canola protein is a good quality protein source.

Puratein Canola Protein

Puratein canola protein's key functionalities are emulsifying, gelling and binding. Puratein canola protein has potential in a wide variety of food types.

Puratein canola protein is a canola protein isolate comprised mainly of globulin proteins. The functional properties of Puratein canola protein include emulsification, gel formation, thickening, formation of heat-stable foams, and water- and ingredient-binding. Applications for Puratein canola protein include meat alternatives, such as burgers and sausages and nutrition bars. Puratein canola protein has a savoury flavour profile with no off-flavours. Merit Foods is marketing Burcon's Puratein canola protein as Puratein G canola protein.

Supertein Canola Protein

Supertein canola protein is a light coloured powder with a mild flavour. It is a highly soluble canola protein isolate, at over 90% protein purity, comprised principally of albumin proteins. The functional properties of Supertein canola protein include high solubility across the pH range, good foaming and whipping capacity that exceeds the performance of egg albumen. Applications for Supertein canola protein include non-dairy frozen desserts, egg alternative, plant-based marshmallows, plant-based ready-to-mix beverages, whipped toppings and plant based bars, among many others. Merits Foods is marketing Burcon's Supertein canola protein as Puratein HS canola protein.

The typical cysteine content of Burcon's Supertein canola protein is nearly double that of whey protein, which is recognized for its high cysteine content.

Nutratein Canola Protein

With purity levels at over 90% protein, Nutratein canola protein consists of a mixture of globulin and albumin proteins. Nutratein canola protein is a fine powder that has good solubility across a broad pH range. Nutratein canola protein has an excellent amino acid profile and its protein digestibility corrected amino acid score (PDCAAS) score makes it an excellent choice for use in meat and egg alternatives, and other plant-based functional foods. Nutratein canola protein benefits from having high cysteine content, one of the limiting amino acids, making Nutratein a nutritional complement to amino acid profile of other plant proteins having a low or deficient cysteine content. Merit Foods is marketing Burcon's Nutratein canola protein as Puratein C canola protein.

Pea Protein/Canola Protein Blends

Burcon has developed proprietary blends of its pea protein products and canola protein products for applications where improved protein nutritional value is desired compared to the use of pea proteins alone or canola proteins alone. In addition to their nutritional value, these blend products, marketed by Merit Foods as its line of MeritPro blend products, have excellent functional attributes. The blends are proprietary plant protein products providing improved protein nutrition that may be used as a convenient alternative to both high protein nutrition animal protein products and soy protein products.

Soy

Soy Protein

Burcon intends to participate in this growing market through its CLARISOY soy protein.

CLARISOY

In November 2008, Burcon announced that it had developed a soy protein which it branded as CLARISOY. Burcon has developed technologies to extract and purify soy protein from a variety of soy materials. These technologies encompass various processes to produce CLARISOY soy protein. A number of different processes are used to produce CLARISOY soy protein specific for certain applications ranging from soluble and transparent beverages with a pH of 4.0 and below to neutral beverages with a pH of 7.0 or higher. CLARISOY is specifically designed to enable beverage manufacturers to meet the demand for great-tasting, nutritionally enhanced beverages targeted to the ever-growing number of health and wellness minded consumers.

Pursuant to ADM License and Production Agreement, ADM marketed CLARISOY as an economical, high-quality plant-based dairy alternative that provided comparable nutrition. Potential applications for CLARISOY included sports nutrition beverages, dairy alternative yogurts and cheeses, powdered beverage mixes, coffee creamers and in numerous other foods and nutritional products.

Based on the PDCAAS method, Burcon's CLARISOY soy protein has a score of 0.98 and 1.00 under the 1989 FAO/WHO pattern and the 2002 FAO/WHO/UNU pattern, respectively, suggesting that Burcon's CLARISOY soy protein is a good quality protein source.

Soy Protein Production

Burcon is investigating alternative paths to bring its soy protein technologies to the market. Burcon is in discussions with potential partners that include soy protein producers and consumer product companies that could benefit from a partnership with Burcon to commercialize it soy protein technologies. Burcon intends to pursue all available opportunities to commercialize and monetize its soy protein intellectual property portfolio.

Hemp

One of Burcon's pipeline technologies involves the extraction and purification of protein from industrial hempseeds, which is being crushed for its high value hemp oil. Burcon is able to adapt its processing technologies to extract and purify protein from hempseeds, producing a food-grade hemp protein isolate. Burcon has two granted patents for hemp protein and possesses the skill and know-how to produce a great tasting and functionally superior hemp protein isolate. Burcon expects that acreage allocated to hempseed production will continue to increase as consumers demand more plant-based products.

Intellectual Property

Patents

In 1999, Burcon acquired the shares of Burcon-MB. At the time of the acquisition, Burcon-MB held patents and applications covering the protein micellar mass process for extracting and producing a canola protein isolate. Since the acquisition, Burcon focuses on developing its protein extraction and purification processes and seeking patent protection for its developments. Through Burcon-MB, Burcon has filed patent applications in various countries over its inventions. Burcon's patent applications can be grouped into three categories:

Applications to protect additional novel protein extraction and purification technologies;

Applications to protect the uses of Puratein, Supertein and Nutratein canola proteins, CLARISOY soy protein, Peazazz pea protein, and other plant proteins, as functional food and beverage ingredients; and

Applications to protect the signature characteristics of Puratein, Supertein and Nutratein canola proteins, CLARISOY soy protein, Peazazz and Peazac pea proteins and other plant proteins.

As of March 31, 2021, Burcon's patents and patent applications covered over 50 distinct inventions. Burcon has filed applications for most of its inventions internationally under the Patent Cooperation Treaty of the World Intellectual Property Organization. As of March 31, 2021, Burcon held 294 issued patents in various countries, including patents covering composition of matter and a number of key processes and uses of Burcon's products as functional food and beverage ingredients, 73 of which have been issued in the U.S. Burcon holds patents or has filed patent applications in Australia, Brazil, Canada, China, Hong Kong, India, Japan, the European Union, Mexico, New Zealand, Russia, South Africa, South Korea, Taiwan, Thailand and the United States. Burcon has over 215 patent applications that are being reviewed by the patent offices in various countries, 33 of which are U.S. patent applications.

Granted U.S. Patents

Burcon holds 73 issued patents in the United States relating to soy protein, canola protein, flax protein and pulse (including pea) protein. Burcon holds patents covering improvements made by Burcon to the protein extraction and purification technologies. These new inventions include:

Soy

Processes to extract and purify soy protein from various soy material to produce soy protein products that are soluble in acidic medium and produces heat stable solutions suitable for protein fortification of sport drinks and other beverages; use of soy protein products in acidic beverages and other products; protection covering the composition and signature characteristics of Burcon's CLARISOY soy protein; and alternative processes for producing soy protein products;

Canola

Technologies for improving the quality of input meal prior to the purification and extraction process, to result in better protein quality and higher protein yield; process improvements to produce canola protein isolate efficiently and to obtain higher yields of canola protein isolate; processes for reducing phytic acid in the production of protein isolates from oilseed meals; phytic acid is a naturally occurring anti-nutritional component found in oilseed meals, such as canola meal and soybean meal; protection covering important processing conditions for producing Supertein canola protein, as well as for the preparation of a highly refined Supertein canola protein and product characteristics; protection covering the composition of the dominant species of protein in Burcon's Puratein canola protein; protection covering the process for producing Nutratein canola protein; processes to improve the final colour profile of Puratein canola protein and Supertein canola protein; applications for the uses of canola protein as a functional food and beverage ingredient; the use of canola protein as a flavour enhancer in a food product; alternative processes for producing canola protein isolates; and protection covering the process for producing protein isolates using mustard seed as a starting material;

Pea and other Pulses

Pulse (including pea) protein product having signature characteristics, including properties in low pH solution; protection covering the processes for producing pulse (including pea) protein products having reduced astringency in low pH solutions and signature characteristics of such products; and alternative process for preparing pulse (including pea) protein products and signature characteristics of such products.

Flax: Processes for the production of flax protein isolates with unique protein profiles.

Trademarks

Burcon has obtained trade-mark registrations for Nutratein, Supertein, Nutratein-PS and Nutratein-TZ in Canada; and Puratein, Peazazz, Peazac and the slogan A New World in Protein in Canada and the United States.

In 2011, Burcon and ADM entered into a trademark assignment and license agreement pursuant to which Burcon assigned its ownership of the CLARISOY trademark to ADM. In return, Burcon obtained a worldwide, non-exclusive, royalty-free license to use the CLARISOY trademark for corporate marketing and promotion of Burcon, conducting research or development of CLARISOY soy protein products and compliance with the requirements of applicable law. As part of the agreement to terminate the ADM License and Production Agreement, the CLARISOY trademark will revert back to Burcon upon payment by Burcon of a certain percentage of the aggregate direct third party costs paid by ADM in connection with the marketing, trademark prosecution, and trademark maintenance of the CLARISOY trademarks.

In June 2020, Burcon granted Merit Foods a royalty-free non-exclusive license (the Original Trademark License Agreement) to certain Burcon trademarks registered by Burcon in association with the products under the Merit License as long as the Merit License is exclusive.

Effective August 27, 2020, Burcon and Merit Foods entered into the amended and restated trademark license agreement (the Amended and Restated Trademark License Agreement). The Amended and Restated Trademark License Agreement amends and restates the Original Trademark License Agreement. Under the Amended and Restated Trademark License Agreement, Burcon has granted Merit Foods an exclusive, worldwide, royalty-free and non-transferable license to use certain of the Burcon's trademarks in connection with certain goods and/or services as long as the Merit License is in effect unless terminated in accordance with the terms of the Amended and Restated Trademark License Agreement or by mutual agreement between the parties. Merit Foods granted Burcon a reciprocal license to use certain of Merit Foods' trademarks for certain goods and/or services under the Amended and Restated Trademark License Agreement on the same terms but for the license being non-exclusive.

Regulatory Approval

In 2019, Burcon announced that it had received a GRAS (Generally Recognized As Safe) no-objection letter from the US Food and Drug Administration (FDA) for its Peazazz and Peazac pea proteins. Burcon had successfully obtained self-affirmed GRAS status for its Peazazz and Peazac pea protein products and had made its submission to the FDA for GRAS notification on June 15, 2018. The FDA has issued a no objection letter with respect to Puratein and Supertein canola proteins. This response indicates that the FDA has no objection to the conclusion that Puratein and Supertein are GRAS for their intended uses in human food.

The manufacture and sale of Puratein, Supertein and Nutratein canola proteins is subject to compliance with regulatory regimes in Canada that require a manufacturer to demonstrate a product's safety as a food. These activities are governed by the federal Food and Drugs Act and Regulations, which are administered by the Food Directorate, Health Products and Food Branch of Health Canada, a Canadian government agency. The Food and Drug Regulations require a manufacturer to notify the Food Directorate in writing of its intention to sell or advertise for sale of a novel food.

History

The company was founded in 1998. It was incorporated under the Business Corporations Act (Yukon) in 1998. The company was formerly known as Burcon Capital Corp. and changed its name to Burcon NutraScience Corporation in 1999.