DALLAS, TX -- June 10th, 2025 --Burcon Nutrascience Corporation (TSX: BU): Stonegate Capital Partners updates their coverage on Burcon Nutrascience Corporation (TSX: BU) during the mid-quarter of 4Q25. Subsequent to the third quarter of 2025, Burcon made continued significant progress in its strategic initiatives. The Company successfully scaled up commercial production of its pea protein isolate, marking a pivotal milestone in its go-to-market strategy. This scale up was accomplished at the Company’s Galesburg facility and took less than 90 days. The truncated timeframe enables Burcon to meet customer demand and unlock revenue opportunities. This pea protein market is expected to have a TAM of approximately US$215M to US$392M.
Company Updates:
Share Consolidation: Subsequent to the third quarter, Burcon announced a share consolidation program. This consolidation will be at a 20:1 ratio and will commence on June 11, 2025. We view this as positive for the Company as it works to optimize its capital structure.
ProMan Partnership: In 3Q25, Burcon detailed a strategic partnership with ProMan to acquire and operate a protein production facility. This partnership, led by Burcon board member John Vassallo, involves ProMan purchasing the facility and leasing it to Burcon. This arrangement allows Burcon to maintain a capital-light position while gaining full control over the production of its entire suite of plant-based protein products. With production online in just 90 days, the Company has reiterated its revenue targets. First-year sales are projected to be in the range of $1M – 3M, with $10+ M revenue expected in year two. Profitability and positive cash flows are expected FY26.
Product Commercialization: During the quarter, the Company collaborated with Puratos to pioneer new canola protein applications, and announced a rights offering to fund production, marketing, and sales of its proteins. The Company also launched next-generation Peazazz® pea protein, now commercially produced at the Galesburg facility mentioned above, and Puratein® canola protein for egg replacement applications. Subsequent to the quarter-end, Burcon's alliance partner, ProMan, signed a purchase and sale agreement to acquire the protein production facility, and Burcon agreed to terms for the purchase and operation of the facility. The Company successfully closed a rights offering with gross proceeds of $9.43M and launched Solatein™ sunflower protein isolate.
Financial Overview: In 3Q25, Burcon generated $0.06M in revenues from the sale of its protein isolate and contract research services, compared to no revenues in the same quarter last year. The Company reported a net loss of $1.8M or $0.01 per share, compared to a net loss of $2.0M or $0.02 per share in the same period last year. R&D expenses decreased to $0.7M from $1.1M, while G&A expenses increased by 1.4% in the same period. The Company received $78,000 in funding from Protein Industries Canada for the scale-up and commercialization of hempseed and sunflower seed proteins. The Company has a pro-forma cash balance of ~10.0M following its rights offering. This gives BU enough liquidity for the foreseeable future.
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 $23.85 to $29.78 with a mid-point of $26.40.
