VANCOUVER, November 15, 2010 /PRNewswire/ -- Burcon
NutraScience Corporation (TSX - BU) ("Burcon") announced today that
it has signed a non-binding letter of intent (the "Letter of
Intent") with Archer Daniels Midland Company ("ADM") which details
the intention of the two parties to enter into a license agreement
pursuant to which Burcon will license (the "License") its
CLARISOY(R) technology to ADM on an exclusive basis to produce,
market and sell CLARISOY(R) soy protein isolates ("CLARISOY(R)" or
the "Products") world-wide (the "Definitive Agreement").
The Letter of Intent outlines the major agreed-upon terms for
the proposed Definitive Agreement whereby Burcon will grant an
exclusive, world-wide and royalty-bearing license to ADM for
Burcon's CLARISOY(R) soy protein isolate technology. The terms of
the proposed License include:
- License to ADM of all intellectual property, including know-how and
trade secrets, concerning the manufacture and use of CLARISOY(R)
- Royalty stream payable to Burcon on a quarterly basis begins upon the
signing of the Definitive Agreement
- Engineering and design of initial semi-works commercial CLARISOY(R)
production plant to be completed by ADM concurrent with the
completion of the Definitive Agreement.
- Royalty structure incorporates financial incentive for ADM to expand
sales globally
Concurrent with and forming part of the Letter of Intent, Burcon
has also agreed to enter into a stand-still/no-shop agreement with
ADM while the two parties negotiate and execute the Definitive
Agreement for the CLARISOY(R) License.
CLARISOY(R)
CLARISOY(R) is a unique soy protein isolate that is 100%
soluble, transparent and low in viscosity in acidic beverages. The
use of CLARISOY(R) allows for the production of transparent protein
fortified beverages such as juices, soft drinks and sport drinks in
the low pH range, down to pH 2.5. CLARISOY(R) is also heat stable
in acidic beverages, allowing thermal processing, including the
ability to hot-fill with no loss in clarity or change in viscosity.
CLARISOY(R) soy protein isolate does not have the "beany" taste
typically associated with soy protein, opening up significant
opportunities in the existing global soy protein market.
Protein ingredients are valued by the food and beverage industry
for two fundamental properties: nutrition and function.
Nutritionally, Burcon's CLARISOY(R) soy protein isolate is
excellent, with a PDCAAS of 1.0, the highest value possible. PDCAAS
is an acronym for the Protein Digestibility Corrected Amino Acid
Score. PDCAAS is a method of evaluating the nutritional value of a
protein based on both the amino acid requirements of humans and
their ability to digest the protein. In recent studies CLARISOY(R)
was found to have as good or better digestibility than
conventionally prepared soy protein isolate and a complete and
balanced amino acid profile. Burcon's CLARISOY(R) contains
exceptionally low levels of certain anti-nutritional factors found
in all plant proteins and is particularly low in phytate and
phenolics. CLARISOY(R) also does not have high levels of the
phytoestrogens, daidzein and genistein, the naturally occurring
isoflavones associated with soy.
Functionally, CLARISOY(R) is equally exciting particularly in
terms of its 100% solubility in acidic solutions and lack of the
"beany" taste typically associated with soy ingredients. The unique
functional trait of acid solubility suggests numerous potential
applications for CLARISOY(R). CLARISOY(R) can easily be
incorporated into various types of acidic beverages to provide a
protein boost, transforming the product into a new category. It is
important to note that CLARISOY(R) is not hydrolyzed and contains
the broad spectrum of storage protein species that make up whole
soy protein.
CLARISOY(R)'s features of acid solubility, transparency in
solution, heat stability, balanced nutritional profile, lack of
"beany" taste, low anti-nutritional factors all in a non-hydrolyzed
complete protein make it unique. Burcon is unaware of any other
commercially available soy protein that can make all these
claims.
The lack of the "beany" taste typically associated with soy
protein ingredients makes CLARISOY(R) ideal not only for acidic
beverages, but also potentially for more traditional applications
such as protein bars and protein-fortified breakfast cereals.
Soy protein is widely accepted by food processors and consumers
alike. The quest for healthier lifestyles has led consumers to
search for alternatives to animal proteins. The U.S. Food and Drug
Administration's approval of a health claim for soy protein has
fuelled soy protein's increasing popularity and general acceptance
among consumers. This factor - the pursuit of health and wellness
in food products - is expected to drive and sustain the market
demand for CLARISOY(R), which can be incorporated into a wide
variety of beverage and food products.
Proposed CLARISOY(R) License
Under the terms of the Letter of Intent, Burcon and ADM have
agreed to negotiate and execute the Definitive Agreement setting
forth the terms and conditions of the License by no later than
March 1, 2011. Under the proposed
License, ADM will build an initial semi-works commercial facility
within a pre-defined time period after the signing of the
Definitive Agreement. A pre-production royalty will be payable
quarterly starting from the signing of the Definitive Agreement
through and until the first sale of the Products from the initial
facility. Upon the first sale of Products from the initial
semi-works commercial facility, ADM will then pay a royalty based
on a percentage of net revenues generated by ADM from the sale of
the Products.
The License further contemplates that ADM will increase capacity
to a full-commercial scale. Upon such increase, a full-commercial
royalty rate will be payable on a percentage of the net revenues
generated by ADM from the sale of CLARISOY(R). Under the proposed
terms of the License, there is a mechanism for ADM to benefit from
a stepped-down royalty rate on the establishment of certain
commercial sales levels in additional geographic regions beyond
North America. The additional
geographic regions include the rest of the world and are defined as
Asia, South and Central America, Europe including Eastern Europe and Africa. Capital costs associated with building
and commissioning of production plants and the general market
development of CLARISOY(R) will be the sole expense of ADM.
The Letter of Intent provides for, and the parties have
contemplated, certain specific timing goals. One of these goals is
the preparation of engineering plans for the first semi-works
commercial production facility to be completed by the date of
signing of the Definitive Agreement.
As part of the Letter of Intent, Burcon has agreed to a
stand-still and no-shop clause with ADM. The stand-still provides
that during the period starting from the date of the execution of
the Letter of Intent and continuing and until the earlier of the
date of signing the Definitive Agreement with ADM or March 1, 2011, Burcon and its officers, agents
and employees will not, directly or indirectly, (i) engage in
discussions or negotiations, (ii) enter into any letter of intent
or contract, or (iii) take any action or encourage any offer or
indication of interest from any person, entity or group, in
relation to the license, sale or other form of transfer of any
Burcon intellectual property related to CLARISOY(R). As previously
noted, it is the intention of the two parties to enter into the
Definitive Agreement on or before March 1,
2011.
Although it is the stated intention of Burcon and ADM to enter
into a Definitive Agreement as described above, the Letter of
Intent is non-binding on the parties except for the stand-still
agreement and certain provisions concerning confidentiality and
each party bearing its own expenses relating to the negotiation of
the Definitive Agreement
"We have worked closely with ADM on Burcon's canola technology
and have valued our relationship with ADM for over seven years. As
a leader in the global food ingredient industry, and one of the
world's pre-eminent producers of soy proteins, ADM is the perfect
partner to commercialize Burcon's CLARISOY(R) soy protein isolate"
said Johann F. Tergesen, President
and Chief Operating Officer, adding, "We believe CLARISOY(R)'s
potential in the global protein ingredient industry will be well
served through the license structure as contemplated in the Letter
of Intent we have executed with ADM today."
BMO Capital Markets has acted as financial advisor to
Burcon.
About Burcon NutraScience
Burcon is a leader in nutrition, health and wellness in the
field of functional, renewable plant proteins. Since 1999, Burcon
has developed a portfolio of composition, application, and process
patents originating from our core protein extraction and
purification technology. We are developing Puratein(R) and
Supertein(TM) canola protein isolates with unique functional and
nutritional attributes, and CLARISOY(R), a revolutionary soy
protein isolate which is 100% soluble and completely transparent in
acidic solutions. Our team of highly specialized scientists and
engineers work from our own research facility to develop and
optimize environmentally sound technologies. To-date, our patent
portfolio consists of 142 issued patents in various countries,
including 24 issued U.S. patents, and in excess of 200 additional
pending patent applications, 59 of which are U.S. patent
applications.
ON BEHALF OF THE BOARD OF DIRECTORS
"Johann F. Tergesen"
Johann F. Tergesen President and
Chief Operating Officer
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 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.
For further information:
Jade Cheng, Chief Financial Officer
Burcon NutraScience Corporation
+1(604)733-0896 / +1(888)408-7960 toll-free
jcheng@burcon.ca
http://www.burcon.ca
AXINO AG
Wolfgang Seybold, Investor Relations Europe
AXINO AG, Königstrasse 26, 70173 Stuttgart, Germany
Tel. +49-711-25-35-92-40 / Fax +49-711-25-35-92-55
wolfgang.seybold@axino.de
http://www.burcon.net