Helix BioPharma Corp. (TSX: HBP) (FRANKFURT: HBP), a
biopharmaceutical company developing drug candidates for the
prevention and treatment of cancer, today announced its financial
results and research and development update for the three and six
month periods ended April 30, 2013 and 2012.
HIGHLIGHTS
- On June 13, 2013, the Company announced the appointment of Mr.
Stace Wills to the Board of Directors of the Company. Mr. Wills's
appointment was effective as of June 12, 2013.
- On May 29, 2013 and April 4, 2013, the Company announced the
initiation of patient enrollment for the fourth and third cohort,
respectively, in the Company's phase I/II clinical safety,
tolerability and preliminary efficacy study of L-DOS47 in
Poland.
- Effective February 22, 2013, Mr. Bill White voluntarily
resigned from the Company's Board of Directors.
- On February 21, 2013, the Company announced the application to
the Toronto Stock Exchange to extend the expiry date of warrants
issued on September 8, 2009 pursuant to a private placement, by an
additional six months, from March 7, 2013 to September 7, 2013. The
Company subsequently announced that its proposal had been approved
by the Toronto Stock Exchange, and that the warrant extension had
become effective, on March 7, 2013.
- Effective February 21, 2013, Mr. Andrew J. MacDougall was
appointed to the Company's Board of Directors in order to satisfy
the statutory requirement for resident Canadians to comprise at
least 25 percent of the Board of Directors pending completion of
the Board's director nomination process. Subsequent to the fiscal
third quarter, Mr. MacDougall voluntarily resigned from the board
of directors following the appointment of Mr. Wills.
- Effective February 8, 2013, Mr. John A. Rogers voluntarily
resigned from the Company's Board of Directors.
RESULTS FROM OPERATIONS
Net income (loss) for the period The Company recorded net loss
of $2,224,000 and net income of $368,000, respectively for the
three and nine month periods ended April 30, 2013 for loss per
common share of $0.03 and earnings per common share of $0.01,
respectively. For the comparative three and nine month periods
ended April 30, 2012, the Company recorded a net loss of $2,868,000
and $15,568,000, respectively for a loss per common share of $0.04
and $0.23.
Included in the net loss for the three month period ended April
30, 2013 is a $69,000 loss adjustment to the overall gain on sale
from discontinued operations which is the result of a post-closing
adjustment to the purchase price. For the nine month period ended
April 30, 2013, the gain on sale from discontinued operations
totalled $6,014,000. On January 25, 2013, the Company announced the
sale of its distribution business in Canada.
In addition, the Company incurred special committee and
settlement agreement expenditures of $25,000 and $6,430,000 in the
three and nine month periods ended April 30, 2012, respectively. No
such costs were incurred in the three and six month periods ended
January 31, 2013.
The Company recorded net loss from continuing operations of
$2,155,000 and $6,281,000, respectively for the three and nine
month periods ended April 30, 2013 for a loss per common share of
$0.03 and $0.09, respectively. For the comparative three and nine
month periods ended April 30, 2012, the Company recorded a net loss
from continuing operations of $3,236,000 and $16,613,000,
respectively for a loss per common share on continuing operations
of $0.05 and $0.25.
Research & development Research and development costs
totalled $1,303,000 and $3,960,000, respectively for the three and
nine month periods ended April 30, 2013. For the three and nine
month periods ended April 30, 2012, research and development costs
totalled $2,138,000 and $6,480,000, respectively.
L-DOS47 research and development expenses for the three and nine
month periods ended April 30, 2013 totalled $683,000 and
$2,092,000, respectively ($1,215,000 and $2,943,000 respectively
for the three and nine month periods ended April 30, 2012). L-DOS47
research and development expenditures mainly reflect expenditures
associated with the Polish Phase I/II clinical study.
Topical Interferon Alpha-2b research and development expenses
for the three and nine month periods ended April 30, 2013 totalled
$87,000 and $599,000, respectively ($363,000 and $1,313,000
respectively for the three and nine month periods ended April 30,
2012). The Company's research and development expenditures
associated with Topical Interferon Alpha-2 for the current fiscal
quarter have been limited and mainly reflect overhead costs
associated with supporting the program. The Company has now limited
ongoing activities to sourcing and qualifying alternative
interferon alpha-2b raw material samples, and finding suitable
strategic partner(s) who would be willing to license or acquire the
product and support the remaining development costs through to
commercial launch. Beginning in Q4 of fiscal 2012, the Company
initiated a downsizing of the staff in the Saskatoon. The Company
proceeded with additional staff downsizing at its Saskatoon
laboratory in October 2012, including a decision to close the
Saskatoon laboratory by the end of November 2012. Costs associated
with the downsizing were charged in Q1 of fiscal 2013.
Corporate research and development expenses for the three and
nine month periods ended April 30, 2013 totalled $339,000 and
$803,000 respectively ($419,000 and $1,109,000 respectively for the
three and nine month periods ended April 30, 2012). The lower
expenses can be attributed to a reduction in payroll expense
associated with headcount reductions of corporate research and
development employees in addition to a reduction in travel and
consulting expenses.
Trademark and patent related expenses for the three and nine
month periods ended April 30, 2013 totalled $94,000 and $118,000
respectively ($18,000 and $127,000 respectively for the three and
nine month periods ended April 30, 2012). The increase in trademark
and patent related expenses in the quarter is the result of the
Company's attempt to seek additional patent protection in
connection with its Biphasix™ technology.
Operating, general & administration Operating, general and
administration expenses for the three and nine month periods ended
April 30, 2013 totalled $911,000 and $2,379,000 respectively and
represents a decrease of $148,000 (14.0%) and $1,323,000 (35.7%)
when compared to the three and nine month periods ended April 30,
2012. Lower operating, general and administration expenses are the
result of ongoing cost cutting measures by the Company, with the
most significant reductions related to lower legal and audit fees
as a result of the Company having voluntarily surrendered its
listing on the NYSE-MKT exchange in the United States, lower
stock-based compensation expenses, reduced headcount and investor
relations activities.
2012 AGM, Special Committee and Settlement All expenses relating
to the special committee of independent directors (the "Special
Committee") formed in connection with the Company's contested
annual general meeting of shareholders held on January 30, 2012
(the "2012 AGM") and the subsequent settlement agreement entered
into with certain of the concerned shareholders (the "Settlement")
were incurred during fiscal 2012.
Finance income and expense Finance income and expense combined
for the three and nine month periods ended April 30, 2013 totalled
$8,000 and $16,000 ($15,000 and $94,000 for the three and nine
month periods ended April 30, 2012). The decrease in fiscal 2013
reflects lower finance income associated with lower cash
balances.
Foreign exchange loss The Company realized a foreign exchange
gain of $51,000 and $24,000 for the three and nine month periods
ended April 30, 2013, respectively. For the three and nine month
periods ended April 30, 2012, the Company realized foreign exchange
losses of $29,000 and $95,000, respectively. Foreign exchange gains
and losses result mainly from the sales and purchases that are
denominated in currencies other than functional currencies. In
addition, they can arise from purchase transactions, as well as
recognized monetary financial assets and liabilities denominated in
foreign currencies.
CASH FLOW
Operating activities from continuing operations Cash used in
operating activities from continuing operations for the three and
nine month periods ended April 30, 2013 totalled $1,576,000 and
$5,667,000 respectively and includes net loss from continuing
operations of $2,155,000 and $6,281,000 respectively. Cash used in
operating activities from continuing operations for the three and
nine month periods ended April 30, 2012 totalled $6,286,000 and
$14,084,000 respectively, and includes a net loss from continuing
operations of $3,236,000 and $16,613,000 respectively.
Significant adjustments for the three and nine month periods
ended April 30, 2013 include depreciation of property, plant and
equipment of $104,000 and $310,000 respectively (2012 - $176,000
and $524,000), deferred lease credits of $(6,000) and $(19,000)
(2012 - $(6,000) and $(19,000)), stock-based compensation of
$68,000 and $240,000 respectively (2012 - $239,000 and $1,392,000),
foreign exchange gain of $51,000 and $24,000 respectively (2012 -
foreign exchange losses of $29,000 and $95,000 respectively) and
changes in non-cash working capital balances related to continuing
operations of $464,000 and $125,000 (2012 - $3,488,000 and
$476,000).
Financing activities from continuing operations Cash provided
from financing activities for the three and nine month periods
ended April 30, 2013 totalled $nil and $nil respectively (three and
nine month periods ended April 30, 2012 totalled $nil and $43,000
respectively). Cash provided from financing activities for the nine
month period ended April 30, 2012 is attributable to proceeds from
the exercise of stock options.
Investing activities from continuing operations Cash used in
investing activities for the three and nine month periods ended
April 30, 2013 totalled $9,000 and $5,000 respectively. For the
three and nine month periods ended April 30, 2012 cash used in
investing activities totalled $21,000 and $39,000 respectively.
Cash flows from discontinued operations The impact of
discontinued operations on the condensed consolidated statement of
cash flows for the three and nine months ended April 30, 2013 and
2012 are as follows:
For the three month For the nine month
periods ended April 30 periods ended April 30
----------------------- ----------------------
In thousands 2013 2012 2013 2012
---------- ---------- ---------- ----------
Cash provided by (used) in
operating activities $ (201) $ 284 $ 1,446 $ 998
Cash provided by (used) in
investing activities (net) (69) - 6,014 -
---------- ---------- ---------- ----------
Net increase in cash from
discontinued operations $ 7,095 $ 284 $ 7,460 $ 998
========== ========== ========== ==========
Cash provided by investing activities includes all costs
associated with closing the sale of the distribution business
against the gross proceeds received.
LIQUIDITY AND CAPITAL RESOURCES
Since inception, the Company has financed its operations from
public and private sales of equity, proceeds received upon the
exercise of warrants and stock options, and, to a lesser extent,
from 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, as well as
economic conditions relating to the state of the capital markets
generally.
At April 30, 2013, the Company had cash and cash equivalents of
$6,674,000 (July 31, 2012 - $4,862,000). The total number of common
shares issued as at April 30, 2013 was 67,226,337 (July 31, 2012 -
67,226,337).
The Company's cash resources have been severely strained by the
costs incurred in connection with the Company's 2012 AGM, Special
Committee and Settlement. On January 24, 2013 the Company's
shareholders approved the Rivex Transaction. Even after the closing
of the Rivex Transaction on January 25, 2013, the Company does not
have sufficient cash reserves to meet anticipated cash needs for
working capital and capital expenditures through the next twelve
months. Since the Company's cash and cash equivalents as at April
30, 2013 of $6,674,000 are not sufficient to see the current
research and development initiates through to completion, the
Company will require additional financing in the near term. The
Company has taken various cost cutting measures and cost-deferral
initiatives and will continue to do so, where necessary, but any
future cost cutting measures and cost-deferral initiatives will be
limited and will not obviate the need for additional financing.
Securing additional financing continues to be of utmost
importance to the Company.
Equity financing has historically been the Company's primary
source of funding. However, the market for equity financings for
companies such as Helix is challenging, especially in the current
economic environment. While the Company has been able to raise
equity financing in recent years, there can be no assurance that
additional funding by way of equity financing will continue to be
available. Any additional equity financing, if secured, would
result in dilution to the existing shareholders, which may be
significant. The Company may also seek additional funding from or
through other sources, including grants, technology licensing,
co-development collaborations, mergers and acquisitions, joint
ventures, and other strategic alliances, which, if obtained, may
reduce the Company's interest in its projects or products or result
in significant dilution to existing shareholders. There can be no
assurance, however, that any alternative sources of funding will be
available. The failure of the Company to obtain additional
financing on a timely basis may result in the Company reducing,
delaying or cancelling one or more of its planned research,
development and/or marketing programs, including clinical trials,
further reducing overhead, or monetizing non-core assets, any of
which could impair the current and future value of the business or
cause the Company to consider ceasing operations and undergoing
liquidation.
Given the Company's conclusion about the insufficiency of its
cash reserves, significant doubt may be cast about the Company's
ability to continue operating as a going concern. The continuation
of the Company as a going concern for the foreseeable future
depends mainly on raising sufficient capital, and in the interim,
reducing, where possible, operating expenses (including making
changes to the Company's research and development plans), including
the delay of one or more of the Company's research and development
programs, and further reducing overhead expenses.
The following table depicts the Company's condensed unaudited
interim consolidated statement of financial position as at April
30, 2013 and July 31, 2012:
In thousands April 30, 2013 July 31, 2012
-------------- --------------
ASSETS
Non-current assets 1,206 1,493
Current assets 6,945 6,123
-------------- --------------
Total assets $ 8,151 $ 7,616
SHAREHOLDERS' EQUITY AND LIABILITIES
Shareholders' Equity 6,832 6,224
Non-current liabilities 4 23
Current liabilities 1,315 1,369
-------------- --------------
Total liabilities and shareholders' equity $ 8,151 $ 7,616
============== ==============
The following table depicts the Company's condensed unaudited
interim consolidated statement of net loss and comprehensive loss
for the three and nine month periods ending April 30, 2013 and
2012:
For the three month For the nine month
periods ended April 30 periods ended April 30
----------------------- ----------------------
In thousands 2013 2012 2013 2012
---------- ---------- ---------- ----------
Expenses
Research and development $ 1,303 $ 2,138 $ 3,960 $ 6,480
Operating, general and
administration 911 1,059 2,379 3,702
Special committee and
settlement agreement - 25 - 6,430
(Gain) on disposal of
property, plant and
equipment - - (18) -
---------- ---------- ---------- ----------
Income (loss) before
finance items (2,214) (3,222) (6,321) (16,612)
Finance items
Finance income 14 20 30 107
Finance expense (6) (5) (14) (13)
Foreign exchange gain
(loss) 51 (29) 24 (95)
---------- ---------- ---------- ----------
59 (14) 40 (1)
Net income (loss) and total
comprehensive income
(loss) from continuing
operations (2,155) (3,236) (6,281) (16,613)
Net income (loss) and total
comprehensive income
(loss) from discontinued
operations - 368 635 1,045
Gain (loss) from sale of
discontinued operations
(net) (69) - 6,014 -
---------- ---------- ---------- ----------
Net income (loss) and total
comprehensive income
(loss) $ (2,224) $ (2,868) $ 368 $ (15,568)
========== ========== ========== ==========
The following table depicts the Company's condensed unaudited
interim consolidated statement of cash flows for the three and six
month periods ending April 30, 2013 and 2012:
For the three month For the nine month
periods ended April 30 periods ended April 30
---------------------- ----------------------
In thousands 2013 2012 2013 2012
---------- ---------- ---------- ----------
Net income (loss) and total
comprehensive income (loss)
from continuing operations $ (2,155) $ (3,236) $ (6,281) $ (16,613)
Items not involving cash 115 438 489 2,053
Change in non-cash working
capital 464 (3,488) 125 476
---------- ---------- ---------- ----------
Net cash provided by (used
in) operating activities (1,576) (6,286) (5,667) (14,084)
Net cash provided by (used
in) financing activities - - - 43
Net cash provided by (used
in) investing activities (9) (21) (5) (39)
Exchange gain (loss) on cash
and cash equivalents 51 (29) 24 (95)
---------- ---------- ---------- ----------
Net increase (decrease) in
cash and cash equivalents
from continuing operations (1,534) (6,336) (5,648) (14,175)
Net increase (decrease) in
cash and cash equivalents
from discontinued
operations (270) 284 7,460 998
Cash and cash equivalents,
beginning of period 8,478 11,919 4,862 19,044
---------- ---------- ---------- ----------
Cash and cash equivalents,
end of period $ 6,674 $ 5,867 $ 6,674 $ 5,867
========== ========== ========== ==========
The Company's condensed unaudited interim consolidated financial
statements and management's discussion and analysis are being filed
with the Canadian Securities Administrators and will be available
under the Company's profile on SEDAR at www.sedar.com as well as on
the Company's website at www.helixbiopharma.com. Shareholders have
the ability to receive a hard copy of the Company's unaudited
condensed interim consolidated financial statements free of charge
upon request at the address below.
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 currently
listed on the TSX and FSE under the symbol "HBP".
Forward-Looking Statements and Risks and
Uncertainties
This news release contains forward-looking statements and
information (collectively, "forward-looking statements") within the
meaning of applicable Canadian securities laws. Forward-looking
statements are statements and information that are not historical
facts but instead include financial projections and estimates;
statements regarding plans, goals, objectives, intentions and
expectations with respect to the Company's future business,
operations, research and development, including the focus of the
Company on its two drug candidates, L-DOS47 and Topical Interferon
Alpha-2b (cervical lesions indication); and other information in
future periods.
Forward-looking statements include, without limitation,
statements concerning (i) the Company's ability to operate on a
going concern being dependent mainly on obtaining additional
financing; (ii) the Company's growth and future prospects being
dependent on the success of one or both of L-DOS47 and Topical
Interferon Alpha-2b; (iii) the Company's priority continuing to be
L-DOS47; (iv) the Company's development programs for Topical
Interferon Alpha-2b, DOS47 and L-DOS47; (v) future expenditures,
insufficiency of the Company's current cash resources and the need
for financing and cost-cutting and/or cost-deferral measures; and
(vi) future financing requirements, the seeking of additional
funding and anticipated future revenue and operating losses.
Forward-looking statements can further be identified by the use of
forward-looking terminology such as "expects", "plans", "designed
to", "potential", "is developing", "believe", "intended",
"continues", "opportunities", "anticipated", "2013", "2014",
"next", ongoing", "pursue", "to seek", "proceed", "objective",
"estimate", "future", "wish", or the negative thereof or any other
variations thereon or comparable terminology referring to future
events or results, or that events or conditions "will", "may",
"could", "would", or "should" occur or be achieved, or comparable
terminology referring to future events or results.
Forward-looking statements are statements about the future and
are inherently uncertain, and are necessarily based upon a number
of estimates and assumptions that are also uncertain. Although the
Company 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. Forward-looking statements, including financial
outlooks, are intended to provide information about management's
current plans and expectations regarding future operations,
including without limitation, future financing requirements, and
may not be appropriate for other purposes. Certain material
factors, estimates or assumptions have been applied in making
forward-looking statements in this news release, including, but not
limited to, the safety and efficacy of L-DOS47 and Topical
Interferon Alpha-2b (low-grade cervical lesions); that sufficient
financing will be obtained in a timely manner to allow the Company
to continue operations; that sufficient cost-deferral and/or
cost-cutting measures will be taken; the timely provision of
services and supplies, including Interferon alpha-2b raw materials,
or other performance of contracts by third parties; future revenue
and costs; the absence of any material changes in business strategy
or plans, other than the implementation of cost-deferral and/or
cost-cutting measures; the timely receipt of required regulatory
approvals, and strategic partner support; and that there will be no
changes in market, economic, industry or regulatory conditions.
The Company's actual results could differ materially from those
anticipated in the forward-looking statements contained in this
news release as a result of numerous known and unknown risks and
uncertainties, including without limitation, the risk that the
Company's assumptions may prove to be incorrect; the risk that
additional financing may not be obtainable in a timely manner, or
at all, and that the Company may be unsuccessful in its
cost-cutting and cost-deferral initiatives; clinical trials may not
commence or complete within anticipated timelines or may fail;
third party suppliers of necessary services or of drug product and
other materials may fail to perform or be unwilling or unable to
supply the Company, which could cause delay or cancellation of the
Company's research and development or distribution activities;
necessary regulatory approvals may not be granted or may be
withdrawn; the Company may not be able to secure necessary
strategic partner support; general economic conditions,
intellectual property and insurance risks; changes in business
strategy or plans; and other risks and uncertainties referred to
elsewhere in this news release, any of which could cause actual
results to vary materially from current results or the Company's
anticipated future results. Certain of these risks and
uncertainties, and others affecting the Company, are more fully
described in the Helix's Annual Information Form, in particular
under the headings "Forward-looking Statements" and "Risk Factors",
and other reports filed with the Canadian Securities Administrators
from time to time under the Company's profile on SEDAR at
www.sedar.com. Forward-looking statements and information are based
on the beliefs, assumptions, opinions and expectations of Helix's
management on the date of this news release, and Helix does not
assume any obligation to update any forward-looking statement or
information should those beliefs, assumptions, opinions or
expectations, or other circumstances change, except as required by
law.
Investor Relations: Helix BioPharma Corp. 3-305
Industrial Parkway South Aurora, Ontario, Canada, L4G 6X7 Tel: 905
841-2300 Email: ir@helixbiopharma.com
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