VANCOUVER, Nov. 15 /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® technology to ADM on an exclusive basis to
produce, market and sell CLARISOY® soy protein isolates
("CLARISOY®" 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® 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®
- 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® 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® License.
CLARISOY®
CLARISOY® is a unique soy protein isolate that is
100% soluble, transparent and low in viscosity in acidic beverages.
The use of CLARISOY® 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® 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® 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® 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® 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® contains exceptionally
low levels of certain anti-nutritional factors found in all plant
proteins and is particularly low in phytate and phenolics.
CLARISOY® also does not have high levels of the
phytoestrogens, daidzein and genistein, the naturally occurring
isoflavones associated with soy.
Functionally, CLARISOY® 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®. CLARISOY® 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® is not hydrolyzed
and contains the broad spectrum of storage protein species that
make up whole soy protein.
CLARISOY®'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® 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®, which can be
incorporated into a wide variety of beverage and food products.
PROPOSED CLARISOY® 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®. 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®
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®. 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® soy protein isolate" said Johann F. Tergesen,
President and Chief Operating Officer, adding, "We believe
CLARISOY®'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®
and Supertein™ canola protein isolates with unique functional and
nutritional attributes, and CLARISOY®, 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.
SOURCE Burcon NutraScience Corporation
Copyright . 15 PR Newswire