DALLAS, TX -- August 14th, 2025 --Burcon Nutrascience Corporation (TSX: BU): Stonegate Capital Partners updates their coverage on Burcon Nutrascience Corporation (TSX: BU). During 1Q26, Burcon advanced meaningfully in its commercialization strategy. Within 90 days of commissioning its Galesburg facility, the Company achieved first commercial production of its next-generation Peazazz® C pea protein and debuted FavaPro™ fava protein. Initial shipments of Peazazz® C were completed during the quarter, supported by strong market reception and customer trials. Burcon also entered into a $6.8 million multi-year production agreement, underpinning its 2025 revenue target of $1–3 million. The Galesburg facility integrates Burcon’s proprietary protein technologies, enabling scalable, versatile production across multiple plant-based proteins. This operational flexibility positions the Company to meet evolving customer needs quickly and with consistent quality, while unlocking a total addressable pea protein market estimated at US$215 million to US$392 million.
Company Updates:
Commercial Engagement and Product Pipeline: The Company showcased its full protein portfolio—including pea, fava, canola, and sunflower proteins—at the 2025 IFT FIRST Annual Event & Expo. Burcon’s offerings drew strong interest from potential customers, reinforcing the Company’s value proposition: sustainable, high-performance proteins with superior taste, nutrition, and functionality. Management reports a growing pipeline of prospects in late-stage product evaluations, which could accelerate order conversion in the coming quarters. Building on the successful ramp-up at Galesburg, Burcon will continue to expand production volumes, enhance process efficiencies, and collaborate with customers on technical applications. The focus remains on securing long-term supply agreements and introducing additional innovative protein products to market.
Corporate Updates: During the quarter, Burcon completed a 20:1 share consolidation effective June 11, 2025, designed to optimize the capital structure and enhance investor appeal. The Company also announced a CFO transition subsequent to quarter-end, aligning leadership with its commercial growth objectives. We also note that the Company began trading on the OTCQB Venture Market during the year, bringing additional liquidity and visibility to the Company’s stock.
Financial Overview: In 1Q26, Burcon generated $0.34M in revenues, a 44% increase over the prior year period, driven by initial protein sales and contract manufacturing services. Net cash used in operations increased to $2.7M from $1.8M in 1Q24, primarily due to $1.6M in startup and commissioning costs at Galesburg. Net loss was $3.5M, or $0.27 per share. These costs were partially offset by a 50% reduction in R&D expenses and a 36% reduction in G&A expenses. Burcon ended the quarter with $4.2M in cash and $1.3M in committed payments under its manufacturing agreement, and management continues to expect profitability and positive cash flows in FY26.
Valuation: We use a DCF Model to frame our valuation of BU. Our DCF analysis relies on a range of discount rates between 10.50% and 11.00% with a midpoint of 10.75%, which we believe accurately accounts for the size and relative illiquidity of BU. This arrives at a valuation range of $19.91 to $25.17 with a mid-point of $22.17.
