Burcon NutraScience Corp (TSX:BU, NASDAQ:BRCN) has released its fiscal 3Q 2022 results which saw the company deliver a 41% quarter-over-quarter revenue bump thanks to its Merit Functional Foods Corporation licensee.
The Vancouver-based plant-based foods company recorded C$44,597 in revenue versus the C$32,000 it put up in 2Q, and compared to nil in fiscal 3Q 2021.
Burcon established Merit Functional Foods Corporation in 2019 as part of a joint venture with three veteran food industry executives.
READ: Burcon NutraScience boosts its intellectual property portfolio with the filing of five more US patent applications
Merit Foods has a 94,000-square foot production facility in Manitoba, Canada to produce, under license, Burcon’s novel pea and canola protein ingredients.
The facility finished construction in December 2020 to supply its pea and canola protein ingredients for use in food and beverage applications.
Merit's protein sales increased 41% quarter-over-quarter yet remain “disproportionately small” compared to the potential production capability of Merit's production facility, according to Burcon.
The last year saw Merit focus on completing the commissioning process, and ensuring protein product quality rather than production, Burcon said. But over the last quarter, Merit has formed relationships with major consumer packaged goods (CPG) companies as part of the procurement process.
Burcon called Merit's sales prospects “encouraging”, adding it expects to see more consumer products using Merit's proteins to be available on store shelves this coming year.
"During our fiscal 2022 third quarter, Burcon's team supported Merit Functional Foods in resolving the final challenges to the process of commissioning Merit's first-of-its-kind plant protein production facility," said Johann Tergesen, Burcon's CEO said in a statement.
Tergesen will be stepping down as its president and CEO effective February 28, 2022.
"With commissioning of Phase 1 complete, Merit's flex production facility is now capable of supplying leading food and beverage customers with true commercial-scale quantities of its highest purity pea and canola proteins,” the outgoing CEO added.
“Merit is on track to achieve production targets, which will in turn support Merit's forecast for the sell-in phase with its CPG company customers. Merit forecasts to reach full allocation of its Phase 1 capacity by the end of calendar 2022."
Overall, Burcon recorded a total net loss of $1.5 million or $0.01 per share, compared to $1.1 million or $0.01 per share in the same year-ago quarter.
It ended the quarter with $9.4 million in cash.
Burcon develops plant-based proteins for foods and beverages and has amassed a large patent portfolio covering its novel plant-based proteins derived from pea, canola, soy, hemp, sunflower seed, among other plant sources.
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