AURORA, ON--(Marketwire - December 10, 2010) - Helix BioPharma Corp. (
TSX:
HBP) (
NYSE Amex:
HBP) (
FRANKFURT:
HBP) today announced financial results for the quarter
ended October 31, 2010.
HIGHLIGHTS
DOS47/L-DOS47:
- Helix announced that it has completed its definitive GLP, rodent and
primate, repeat-dose toxicology studies with L-DOS47. These studies
demonstrated a good safety profile in an expanded number of rodent and
primate test animals, building upon Helix's positive findings from its
preliminary non-GLP toxicology studies.
Topical Interferon Alpha-2b:
- Helix announced the filing of an investigational new drug application
with the U.S. Food and Drug Administration ("FDA"), seeking approval to
perform a planned Phase II/III efficacy trial of Topical interferon
Alpha-2b in patients with low-grade cervical lesions, which is currently on
clinical hold pending further review by the FDA.
- Further announced positive safety and efficacy findings from its Phase
II PK study of Topical Interferon Alpha-2b in patients with low-grade
cervical lesions.
Financing:
- Completed a private placement financing on August 6, 2010 for net
proceeds of $9,457,000.
- Trading of Helix common stock commenced on the NYSE Amex stock
exchange.
Other:
- Subsequent to the Company's fiscal Q1 2011, Helix entered into an
agreement to transfer world-wide Klean-Prep® rights, except Canada, to
Helsinn Birex Pharmaceuticals Limited. The parties also entered into a new
supply agreement where Helsinn will supply Klean-Prep® to Helix with terms
extending over a ten year period, subject to certain performance
conditions. Helix will retain the Canadian rights to Klean-Prep® and
continue to distribute the product in Canada.
- Helix exclusively retained US investor relations firm, Consulting for
Strategic Growth 1 Ltd.
RESULTS FROM OPERATIONS
Three month period ended October 31, 2010 compared to the same period in
the previous year
Loss for the period
The Company recorded a loss of $3,563,000 or $0.06 per common share,
resulting in an increased loss of $90,000 when compared to the first
quarter of fiscal 2010. The Company recorded a loss of $3,473,000 or $0.06
per common share in the first quarter of fiscal 2010.
Revenues
Revenues in the first quarter of fiscal 2011 totaled $1,205,000 (2010 -
$1,020,000) resulting in an increase of $185,000 or 18.1% when compared to
the first quarter of fiscal 2010.
Product revenues totaled $1,105,000 in the first quarter of fiscal 2011.
When compared to the first quarter of fiscal 2010, product revenues
increased by $202,000 or 22.4%. Except for Normacol®, product revenues
were higher across all products, with the majority of the increase
reflected primarily in the increased volume of combined product sales of
Orthovisc® and Monovisc™. The Company commenced distribution of
Monovisc™ in Canada in the first quarter of fiscal 2010.
License fees and royalties totaled $100,000 in the first quarter of fiscal
2011. When compared to the first quarter of fiscal 2010, license fees and
royalties were lower by $17,000 or 14.5%. License fees and royalty
revenues are comprised solely of royalties related to sales of Klean-Prep®
outside of Canada. As a result of the agreement with Helsinn, referred to
above, Helix will no longer earn royalty revenue associated with
Klean-Prep®, going forward.
Cost of sales
Cost of sales totaled $414,000 in the first quarter of fiscal 2011 (2010 -
$418,000). As a percentage of product revenues, cost of sales in the first
quarter of fiscal 2011 and the first quarter of 2010 were 37.5% and 46.3%,
respectively.
Research & development
Research and development costs in the first quarter of fiscal 2011 totaled
$2,401,000 (2010 - $2,925,000) for a decrease of $524,000.
Topical Interferon Alpha-2b research and development costs in the first
quarter of fiscal 2011 totaled $1,054,000 (2010 - $1,550,000) for a
decrease of $496,000. Lower research and development expenditures are
associated with both of the Company's Topical Interferon Alpha-2b clinical
programs having been completed. The lower clinical research expenditures
were offset by higher consulting services and scale-up contract
manufacturing initiatives in preparation of the U.S. Phase II/III IND filed
during the first quarter of fiscal 2010 and the planned European Phase III
CTA filing for the low-grade cervical lesions indication.
L-DOS47 research and development costs in the first quarter of fiscal 2011
totaled $1,347,000 (2010 - $1,375,000) for a decrease of $28,000. L-DOS47
research and development expenditures since the first quarter of fiscal
2010 primarily relate to ongoing collaborative scientific research
expenditures and clinical research expenditures in anticipation of U.S.
Phase I IND and Polish Phase I/II CTA filings.
Operating, general & administration
Operating, general and administration expenses in the first quarter of
fiscal 2011 totaled $976,000 (2010 - $677,000) for an increase of $299,000.
The increase in operating, general and administration expenditures is the
result of higher legal and audit fees in the first quarter of fiscal 2011
associated with the filing of a preliminary base shelf prospectus with the
Ontario Securities Commission and related registration statement with the
US Securities and Exchange Commission and the Company's listing on the NYSE
Amex, in addition to wage increases and higher costs associated with
increased investor relations initiatives.
Sales and marketing
Sales and marketing expense in the first quarter of fiscal 2011 totaled
$258,000 (2010 - $261,000) for a decrease of $3,000. The Company incurred
higher sales commissions and sales agent expenses as a result of increased
sales in the first quarter of fiscal 2011 compared to the first quarter of
fiscal 2010, which were partially offset by lower marketing and promotion
activities associated with the Canadian product launch of Monovisc™ in
the first quarter of fiscal 2010.
Stock-based compensation
Stock-based compensation expense in the first quarter of fiscal 2011
totaled $694,000 (2010 - $160,000). The stock-based compensation expense
in the first quarter of fiscal 2011 relates to the ongoing amortization of
compensation costs of stock options granted on August 17, 2010, December
14, 2009 and December 17, 2008, over their vesting period.
Interest income
Interest income in the first quarter of fiscal 2011 totaled $50,000 (2010 -
$14,000). The increase in interest income in fiscal 2011 reflects higher
interest rates earned on deposits.
Foreign exchange gain
Foreign exchange gains in the first quarter of fiscal 2011 totaled $35,000
(2010 - $42,000). Foreign exchange gains are mainly the result of the
foreign currency translation of the Company's integrated foreign operation
in Ireland. The net assets in Ireland consist mainly of cash and cash
equivalents, denominated in Euros, which are used to fund clinical trials
of Topical Interferon Alpha-2b in Europe.
Income taxes
Income tax expense in the first quarter of fiscal 2011 totaled $3,000 (2010
- $10,000). Income taxes are attributable to the Company's operations in
Ireland.
CASH FLOW
Operating activities
Cash used in operating activities totaled $3,083,000 in the first quarter
of fiscal 2011 (2010 - $2,348,000), include a net loss of $3,563,000 (2010
- net loss of $3,473,000).
Significant adjustments in the first quarter of fiscal 2011 include
stock-based compensation of $694,000 (2010 - $160,000), amortization of
capital assets of $107,000 (2010 - $98,000), deferred lease credits of
$6,000 (2010 - $8,000), foreign exchange gains of $35,000 (2010 - $42,000)
and changes in non-cash working capital balances related to operations of
negative $280,000 (2010 - $917,000).
Financing activities
Financing activities in the first quarter of fiscal 2011 were $9,457,000
(2010 - $11,597,000). Financing activities in the first quarter of fiscal
2011 and 2010 reflect the net proceeds from private placements in each of
the respective quarters.
Investing activities
Use of cash in investing activities in the first quarter of fiscal 2011
totaled $9,000 (2010 - $245,000).
LIQUIDITY AND CAPITAL RESOURCES
Since inception, the Company has financed its operations from public and
private sales of equity, the exercise of warrants and stock options, and,
to a lesser extent, interest income from funds available for investment,
government grants, investment tax credits, and revenues from distribution,
licensing and contract services. Since the Company does not have net
earnings from its operations, the Company's long-term liquidity depends on
its ability to access the capital markets, which depends substantially on
the success of the Company's ongoing research and development programs.
At October 31, 2010, the Company had cash and cash equivalents totaling
$19,525,000 (July 31, 2010 - $13,125,000). The increase in cash and cash
equivalents in the first quarter of fiscal 2011 is the result of a private
placement completed on August 6, 2010 where the Company issued 4,530,000
units at $2.43 per unit, for net proceeds of $9,457,000. Each unit
consists of one common share and one common share purchase warrant with
each whole common share purchase warrant entitling the holder to purchase,
subject to adjustment, one common share at a price of $3.40 until 5pm
(Toronto time) on August 5, 2013. The total number of common shares issued
as at October 31, 2010 was 64,505,335 (July 31, 2010 - 59,975,335).
Based on our planned expenditures and assuming no material unanticipated
expenses, our forecasts indicate that our cash reserves and expected cash
from operations will be sufficient to meet our anticipated cash needs for
working capital and capital expenditures through at least the next twelve
months. These planned expenditures do not include those necessary to
conduct the proposed U.S. Phase I and Polish Phase I/II clinical trials for
L-DOS47 or the proposed U.S. Phase II/III and European Phase III clinical
trials for Topical Interferon Alpha-2b (low-grade cervical lesions). As
stated above, these trials will require substantial funding beyond the
Company's current resources.
The Company will continue to seek additional funding to carry out its
business plan and to minimize risks to its operations. Equity financing
has historically been Helix's primary source of funding, however, the
market for equity financings for companies such as Helix is challenging,
and the global economic downturn and credit crisis have added further
challenges. There can be no assurance that additional funding by way of
equity financing will be available. Any additional equity financing, if
secured, may result in significant dilution to the existing shareholders at
the time of such financing. The Company may also seek additional funding
from other sources, including technology licensing, co-development
collaborations, and other strategic alliances, which, if obtained, may
reduce the Company's interest in its projects or products. There can be no
assurance, however, that any alternative sources of funding will be
available. The failure of the Company to obtain additional funding on a
timely basis may result in the Company reducing, delaying or cancelling one
or more of its planned research, development and marketing programs and
reducing related personnel, any of which could impair the current and
future value of the business. It may also have a material adverse effect
on the Company's ability to continue as a going concern.
On November 23, 2010, the Company filed a base shelf prospectus with the
Ontario Securities Commission and related registration statement with the
SEC which would allow the Company to raise up to US$75,000,000 until late
December, 2012.
The Company's unaudited interim consolidated balance sheet as at October
31, 2010 and audited consolidated balance sheet as at July 31, 2010 are
summarized below:
Consolidated Balance Sheets as at
(thousand $)
31-Oct 31-Jul
2010 2010
--------- ---------
Current assets:
Cash and cash equivalents 19,525 13,125
Accounts receivable 1,461 1,365
Inventory 787 780
Prepaid and other 247 398
--------- ---------
22,020 15,668
Non current assets 2,348 2,446
--------- ---------
Total assets 24,368 18,114
========= =========
31-Oct 31-Jul
2010 2010
--------- ---------
Current liabilities:
Accounts payable 1,565 1,435
Accrued liabilities 363 821
Deferred lease credit 25 25
--------- ---------
1,953 2,281
Non current liabilities 66 72
--------- ---------
Total liabilities 2,019 2,353
Shareholders' equity 22,349 15,761
--------- ---------
Total liabilities & Shareholders' Equity 24,368 18,114
========= =========
The Company's unaudited interim consolidated Statements of Operations and
Cash Flows for the three month periods ended October 31, 2010 and 2009 are
summarized below:
Consolidated Statements of Operations
for the three month period ended October 31
(thousand $, except for per share data)
2010 2009
-------- --------
Revenue:
Product revenue 1,105 903
License fees & royalties 100 117
-------- --------
1,205 1,020
Expenses:
Cost of sales 414 418
Research and development 2,401 2,925
Operating, general and admin 976 677
Sales and marketing 258 261
Amortization of capital assets 107 98
Stock-based compensation 694 160
Interest income (50) (14)
Foreign exchange (gain) (35) (42)
-------- --------
4,765 4,483
Loss before income taxes (3,560) (3,463)
Income taxes 3 10
-------- --------
Loss for the year (3,563) (3,473)
======== ========
Loss per share:
Basic and diluted (0.06) (0.06)
-------- --------
Consolidated Statements of Cash Flows
for the three month period ended October 31
(thousand $, except for per share data)
2010 2009
-------- --------
Cash provided by (used in):
Loss for the year (3,563) (3,473)
Items not involving cash:
Amortization of capital assets 107 98
Deferred lease credit (6) (8)
Stock-based compensation 694 160
Foreign exchange (gain) (35) (42)
-------- --------
(2,803) (3,265)
Change in non-cash
working capital (280) 917
-------- --------
Operating activities (3,083) (2,348)
Financing activities 9,457 11,597
Investing activities (9) (245)
Effect of exchange rate changes
on cash and cash equivalents 35 42
-------- --------
Cash and cash equivalents:
Increase in the year 6,400 9,046
Beginning of the year 13,125 14,494
-------- --------
End of the year 19,525 23,540
======== ========
The Company's unaudited interim consolidated financial statements and
management's discussion and analysis of financial condition and results of
operations have been filed, today, with Canadian securities regulatory
authorities and will be available at SEDAR at
www.sedar.com
About Helix BioPharma Corp.
Helix BioPharma Corp. is a biopharmaceutical company specializing in the
field of cancer therapy. The Company is actively developing innovative
products for the prevention and treatment of cancer based on its
proprietary technologies. Helix's product development initiatives include
its novel L-DOS47 new drug candidate and its Topical Interferon Alpha-2b.
Helix is listed on the TSX, NYSE Amex and FSE under the symbol "HBP".
Forward-Looking Statements and Risks and Uncertainties
This News Release contains certain forward-looking statements and
information (collectively, "forward-looking statements") within the meaning
of applicable securities laws, regarding the development of products by
Helix for the prevention and treatment of cancer based on its proprietary
technologies, sufficiency of the Company's cash reserves and expected cash
flow from operations; seeking additional financing, and other information
in future periods. Although Helix believes that the expectations reflected
in such forward-looking statements are reasonable, such statements involve
risks and uncertainties, and undue reliance should not be placed on such
statements. Certain material factors or assumptions are applied in making
forward-looking statements, including, but not limited to, receipt of
necessary additional funding, strategic partner support and regulatory
approvals; GMP manufacturing and other activities; the timely provision of
services and performance of contracts by third parties; the successful and
timely closing of the transfers of certain Klean-Prep® rights to Helsinn,
and future revenue, costs and expenditures. Helix's actual results could
differ materially from those anticipated in these forward-looking
statements as a result of numerous risks and uncertainties including
without limitation, Helix's need for additional capital, which may not be
available; uncertainty whether the Company's products under development,
including L-DOS47 and Topical Interferon Alpha-2b, will be successfully
developed and commercialized; uncertainty whether clinical trials will
proceed as planned or at all, and the risk that clinical trial results may
be negative; uncertainty whether the transfers of certain Klean-Prep®
rights to Helsinn will occur in a timely manner or at all; insurance and
intellectual property risks; research and development risks; the need for
further regulatory approvals, which may not be obtained; the Company's
dependence on its third-party service providers; upscaling and
manufacturing risks; partnership / strategic alliance risks; the effect of
competition; the risk of technical obsolescence; uncertainty of the size
and existence of a market opportunity for Helix's products; uncertainty
whether the Company will be able to obtain an appropriate pharmaceutical or
strategic partner for the drug candidates, which are not assured; changes
in business strategy or plans; and the risk factors that are discussed
under Item 3.D. - "Risk Factors" in the Company's latest Form 20-F Annual
Report or identified in the Company's other public filings with the
Canadian Securities Administrators at
www.sedar.com or with the SEC at
www.sec.gov. Forward-looking statements and information are based on the
beliefs, assumptions and expectations of Helix's management at the time
they are made, and Helix does not assume any obligation to update any
forward-looking statement or information should those beliefs, assumptions
or expectations, or other circumstances change, except as required by law.
Contact Information: For further information contact:
Investor Relations:
Stanley Wunderlich
Consulting for Strategic Growth 1 Ltd.
Tel: 800-625-2236 ext. 7770
Email:
Web Site: www.cfsg1.com
Media Relations:
Richard Stern
Stern & Co.
Tel: 212 888-0044
Email:
Web Site: www.sternco.com