DALLAS, TX -- February 12th, 2026 --Burcon Nutrascience Corporation (TSX: BU): Stonegate Capital Partners updates their coverage on Burcon Nutrascience Corporation (TSX: BU). Burcon’s Galesburg production facility represents a pivotal transition from development-stage operations to commercial scale, with 3Q26 revenue of $739,000 reflecting approximately 107% quarter-over-quarter growth driven by protein sales and production activity at the site. Notably, the Company entered CY2025 without a production facility and exited the year meeting its revenue target, underscoring the speed of commercialization following Galesburg’s launch. Management indicated that staffing and infrastructure are now in place, positioning incremental volume growth to occur with limited additional fixed costs and supporting operating leverage as throughput increases. Importantly, once a customer’s product is commercialized, ingredient purchases typically recur on a month-to-month basis; with approximately 65–70% of expected growth tied to customers already purchasing and over 200 active projects in the pipeline, Galesburg serves as the backbone of durable, recurring revenue expansion.
Product Pipeline: Burcon’s expanding protein pipeline positions the Company to capitalize on rising demand for higher-protein products, and management’s tone on the call was notably enthusiastic and encouraging. Increased consumer focus on health and the growing adoption of GLP-1 weight-loss medications are driving demand for higher protein intake in lower-calorie diets. The Company’s portfolio includes pea, canola, sunflower, and fava proteins, all supported by its high-purity technology platform that enhances taste and functionality while allowing customers to increase protein content without sacrificing quality. Management also highlighted growing adoption of blended protein formulations, as customers combine multiple plant proteins to optimize performance and nutrition, creating cross-selling opportunities across Burcon’s platform.
Financing Makes Room for Growth: Recently, BU announced a non-brokered private placement that has been upsized to $6.9M in unsecured convertible debentures bearing 15% annual interest (payable at maturity) with a 48-month term and a conversion price of $2.27 per share, including a conditional accelerated prepayment or conversion feature if the share price trades above $4.54 for 14 consecutive trading days. Insiders committed to a minimum of $5.0M. Burcon has already closed the first $1.25M tranche of this deal, with the full deal expected to close in the coming months. Proceeds are primarily intended for inventory, labor, and production capability.
Financial Overview: In 3Q26, Burcon generated $0.74M in revenues, a 1101.9% increase over the prior year period, driven by initial protein sales and contract manufacturing, with year-to-date revenue of ~$1.44M. The quarter’s net loss was $3.57M, or $0.28 per share, reflecting $2.3M in COGS that included startup and commissioning costs; operating focus shifted toward commercialization, with R&D and G&A expenses down 44% and 22% respectively, from the prior year period. The Company ended 3Q26 with $1.3M in cash. The Company issued updated guidance projecting double-digit revenue growth and achieving positive free cash flow in CY26.
Valuation: We use a DCF Model to frame our valuation of BU. Our DCF analysis relies on a range of discount rates between 10.25% and 10.75%, which arrives at a valuation range of $18.49 to $23.76 with a mid-point of $20.75.
