TORONTO, ONTARIO--(Marketwire - June 6, 2011) -
- Commercial production and sales of 80%-plus purity protein isolates has commenced
- Market for 80% isolate is robust, with pricing similar to previous guidance for 90% isolate
- Plant operations proceeding well and improving, with a continued near-term focus on 90% purity
- Upside potential for revenue remains once 90% is consistently achieved
- New Intellectual Property may drive long term capital and operating cost savings
- FDA GRAS Notification has been filed for Isolexx™ and Vitalexx™
BioExx Specialty Proteins Ltd. (TSX:BXI) ("BioExx" or the "Company") is pleased to announce the commencement of commercial food-grade protein operations, comprising daily production and sales of canola protein isolates, making it the first and only such company in the world. Since its last update, BioExx has made progress in a number of critical production areas at its Saskatoon plant which have enabled the Company to move beyond the internal start-up phase and into commercial operations.
The initial focus of short-term production and sales will be on canola protein produced to purity levels of 80% or above, for which there is an established, substantial, and robust market. The customers and applications at 80% and 90% purity are largely the same, with the main differentiator being protein pricing. The two are used somewhat interchangeably in many food and beverage products, such as protein shakes, bars, baked goods, confectionaries, meat analogues, and meal replacers. BioExx also notes that it has confirmed significant protein market sectors in high-value, non-food applications, including sustainable ingredients for cosmetic and industrial products.
The characteristics of the BioExx canola protein products are generally superior to typical soy products and in many cases competitive with whey proteins. The company is selling this product, Advantexx80™, as an isolate at 80% or greater purity while it continues to work toward ensuring that 100% of production meets 90% purity, at which point a 90% isolate will be offered to the market.
In general, 80% purity proteins sell at about a 15-20% discount to 90% purity proteins. Recent channel checks with buyers suggest current indicative pricing for whey protein isolates with 90% purity (called "WPI-90") at approximately $13.00 per kg, and whey protein isolate at 80% purity (called "WPI-80") at approximately $11.00 per kg. Given strong pricing in broader protein markets, BioExx has posted pricing for its 80% canola protein isolates ("CPI-80") at $6.00 per kg, competitive with high quality and similar purity soy and whey products and consistent with the Company's earlier guidance on pricing of Isolexx™ at 90% purity.
First commercial shipments from the Saskatoon plant are being arranged presently for delivery to the Company's protein distribution partner, Helm AG, for re-sale to its customers. Sales are expected to grow steadily from here forward, both to Helm AG and to direct BioExx customers in North America, as production volumes at the Saskatoon plant continue to increase.
The plant has progressed on both hourly throughput and on quality, with continued improvements still to come. The plant is running well mechanically, with good predictability. While all individual equipment has now proven operational at 100% run rate, the entire plant is now running at an average aggregate hourly throughput rate of approximately 35% of capacity with as high as 65% having been achieved so far. Further gains are now being made on a weekly basis and the Company believes that the key previous issues that represented significant impediments to productivity have been resolved.
With hourly throughput solidified and improving, great effort is now being placed on increasing weekly operating uptime by reducing clean-in-place cycle time, adding production staff to run additional shifts, and steadily diminishing the amount of unplanned process interruption. Because the plant is only now moving from start-up mode to full operating mode, weekly production has remained below 10% of installed capacity. Weekly production is expected to increase measurably now, with another production shift being added presently to enable operations on a 5 day per week schedule through the end of July, at which point the plant will take a standard annual two week summer plant maintenance and improvement shut down, bring on a final shift, and re- start in mid-August on a 7 day per week schedule. Production is expected to be at or above 50% of Phase 2 capacity soon after the August shutdown with a plan to drive toward 100% as quickly as possible.
Protein yield is now about 50% of target, as the focus has been on other operating parameters. The path to reaching near 100% yield targets is well understood, with all required equipment already installed. Higher yields are expected to unfold in step with production volumes throughout the continued ramp-up as this equipment is brought on line.
Perhaps the most significant recent achievement at the plant has been process modifications to widen the operating parameters in the extraction area, which has been the primary bottleneck and source of most of the challenges encountered in start-up to date. These modifications have successfully enabled improved operating consistency and provided a clear and confident path to higher capacities. This has been the Company's primary hurdle to date, and the key precondition to the commencement of regular commercial operations.
Beneficially, these process modifications also represent new and valuable intellectual property for BioExx, in the accumulation of valuable trade secrets and "know-how". Moreover, the knowledge gained and modifications made through the start-up phase may result in significantly lower capital and operating cost for future plants.
"There is little doubt that the start-up of this first-in-the-world facility has taken longer, and been far more difficult, than originally anticipated. Operations at scale have not always acted consistent with lab and pilot work, and each resulting modification has taken longer than desired due to normal design, ordering, installation, and break-in times, but we have always pressed on and have successfully worked through each challenge that has arisen," said BioExx CEO Chris Carl. "We are therefore particularly pleased to have succeeded in becoming the world's first commercially producing, food-grade canola protein company. We still have much to do, but given what has been accomplished as a team to date, we are confident we can overcome any remaining challenges, and look forward to continuing to create long-term value for our shareholders as we press forward."
BioExx is also pleased to announce that it has completed its filing of a formal GRAS Notice in accordance with the U.S. Food & Drug Administration ("FDA") proposed regulation 62FR 18938. According to the GRAS Notice as filed, BioExx has determined after extensive external and independent scientific panel review that its high-purity canola protein products, Isolexx™ and Vitalexx™ are Generally Recognized As Safe (GRAS) for their intended use in a variety of food and beverage products. Once a GRAS Notice is received by FDA, FDA evaluates the submission and advises whether it believes the Notice provides a sufficient basis for an affirmative GRAS determination, generally within 180 days.
While BioExx already has self-affirmed GRAS status for Isolexx™ and Vitalexx™, which fulfils the FDA regulatory requirement for sales in the U.S. and meets the needs of the vast majority of applications and customers for BioExx proteins, the GRAS Notice was filed in order to move towards an enhanced level of regulatory status to ensure the satisfaction of, and meet the purchase requirements of, even the most stringent applications and most demanding customers. The Company also notes that it has self-affirmed GRAS for its 80% protein isolate, Advantexx80™, and therefore meets the regulatory requirement for sales of that product into the US market.
About BioExx Specialty Proteins Ltd.
Headquartered in Toronto, Canada, BioExx is a leading technology and industrial processing company focused on the extraction of oil and high-value proteins from oilseeds for the global food, beverage, and nutrition markets. BioExx uses patented and patent-pending technology that utilizes significantly lower temperatures than conventional methods for extracting the final quantities of oil necessary to enable its simplified and patent- pending methods for separating proteins from oilseeds. BioExx believes that these processes cumulatively have the potential to make a valuable contribution to global food and protein supply while maintaining an environmentally sustainable footprint. BioExx operates a commercial scale extraction facility in Saskatoon, Saskatchewan, is in development stages on it second plant in Minot, North Dakota and has a mission to construct additional and larger processing facilities on a global basis.
To find out more about BioExx Specialty Proteins Ltd. (TSX:BXI), please visit www.bioexx.com.
The statements made in this press release include forward-looking statements that involve a number of risks and uncertainties. These statements relate to future events or future performance and reflect management's current expectations and assumptions. A number of factors could cause actual events, performance or results to differ materially from the events, performance and results discussed in the forward-looking statements, such as the economy, generally, competition in its target markets, the demand for BioExx's products, the availability of funding, the efficacy of its technology, and the anticipated costs of BioExx's plant construction and operation. These forward-looking statements are made as of the date hereof and BioExx does not assume any obligation to update or revise them to reflect new events or circumstances. Actual events or results could differ materially from BioExx's expectations and projections.