BioExx seeks partner as new boss signals change in strategy
The Toronto-based firm, which has developed a proprietary extraction process claimed to significantly improve the solubility, functionality, flavor and odor of canola proteins, operates a protein manufacturing site in Saskatoon and had planned to build a second plant in North Dakota.
Commercialization efforts have ‘not unfolded according to our original expectations’
However, its efforts “to deploy our technology at a commercial scale have not unfolded according to our original expectations”, admitted Chris Schnarr - who has been running BioExx since August following the departure of Chris Carl - and was officially appointed chief executive yesterday.
Rather than “over-allocate limited and high-cost capital” to increase capacity at Saskatoon, bosses had now resolved to seek “a major strategic partner or partners” with experience in ingredients production instead, he added.
Recognizing our limitations and moving forward
“While we understand the frustration of our shareholders, we have successfully overcome a vast array of challenges in the development and early-stage commercialization of the first complete plant-based protein source in half a century.
“We have created a new protein source that is nutritional, functional, sustainable, and solvent free. This is a very notable achievement… The next step is to refine, leverage, and unlock that value. This means recognizing our limitations and moving forward.”
On a more positive note, Schnarr was able to announce “a significant technological advancement” - the development of a solvent-free canola protein isolate production process - which is now being employed at the Saskatoon plant, he said.
Solvent-free extraction process
The patent-pending process involves enzyme-assisted mechanical separation and filtration, and is cleaner, more sustainable, more robust and more scalable than the previous solvent-based process, claimed Schnarr.
Meanwhile, efficiencies at Saskatoon had improved significantly following a recent plant shutdown and the move to the new solvent-free process, he said.
“In simplest terms, we are putting feedstock into the system twice as fast as before shutdown, getting over 1.5 times the yield, and therefore producing protein at over three times the pre-shutdown rate. That is a meaningful increase in efficiency.”
$5.7m loss in Q3
Once a strategic partner is engaged, bosses would “determine optimal capital allocations between the Saskatoon plant and future projects in the context of this environment”, he said.
BioExx posted a net loss of $5.7m in the three months to September 30 compared with a $3m loss for the comparable prior year quarter. It generated revenues of $930,239 from canola oil and canola meal sales at its Saskatoon plant.
The firm, which recently struck a deal with Hormel Foods to develop a new range of sports nutrition products based on canola protein, says it has improved the flavor and odor profile of canola proteins and decreased the ‘anti-nutrients’ that have historically hindered its use as a food grade material by up to 90%.
Rival Burcon: We are a technology company
Canadian plant protein rival Burcon, which is also seeking a partner to manufacture canola proteins, had also considered processing them in-house, but ultimately decided to remain as a technology company, president Johann Tergesen told NutraIngredients-USA last month.
Tergesen, who recently struck a high-profile deal with ADM under which ADM will manufacture soy protein isolates using Burcon’s technology at its soy protein plant in Decatur, Illinois, added:
“We have considered producing [canola proteins] ourselves, we’ve even researched sites. But we are a technology company. We don’t have the production expertise or the experience in selling, marketing and distributing food ingredients.
“We are going to stick to our knitting and work on doing a licensing and production deal or a joint venture with a partner to get the proteins to market.”
