AURORA, Ontario, Dec. 11 /PRNewswire-FirstCall/ -- Helix BioPharma Corp. today announced financial results for the first quarter of fiscal 2009, ended October 31, 2008.
RECENT HIGHLIGHTS
Results from Operations
Three month period ended October 31, 2008 compared to the same period in the previous year
Loss for the period
During the first quarter of fiscal 2009, the Company recorded a loss of $2,321,000 or $0.05 per common share, resulting in a higher loss of $677,000 when compared to the first quarter of fiscal 2008. The Company recorded a loss of $1,644,000, or $0.05 per common share in the first quarter of fiscal 2008.
Revenues
Revenues in the first quarter of fiscal 2009 totaled $1,119,000 (2008 - $885,000), resulting in an increase of $234,000 or 26.4% when compared to the first quarter of fiscal 2008.
Product Revenue
Product revenues totaled $921,000 in the first quarter of fiscal 2009 and represent 82.3% of total revenues. When compared to the first quarter of fiscal 2008, product revenues increased by $167,000 or 22.1% and are primarily driven by higher Orthovisc(R) product sales.
License Fees and Royalty Revenue
License fees and royalties totaled $198,000 in the first quarter of fiscal 2009 and represent 17.7% of revenues. When compared to the first quarter of fiscal 2008, license fees and royalties were higher by $67,000 or 51.1%. License fees and royalty revenues are comprised solely of royalties related to sales of Klean-Prep(TM) outside of Canada except in the first quarter of fiscal 2009 which includes a US$75,000 termination payment from Lumera Corporation.
Research and Development Contract Revenue
The Company had no research and development contract revenue in both the first quarters of fiscal 2009 and 2008.
Cost of sales and margins
Cost of sales totaled $447,000 in the first quarter of fiscal 2009 (2008 - $313,000). Margins, on a percentage basis, in the first quarter of fiscal 2009 were 51.5% (2008 - 58.5%). The decrease in margins reflects higher purchase costs resulting from a lower Canadian dollar versus both the U.S. dollar and the Euro. In addition, some competitive pricing in the current market has also resulted in lower pricing to customers.
Research & development
Research and development costs in the first quarter of fiscal 2009 totaled $1,641,000 (2008 - $782,000) for an increase of $859,000. Higher research and development costs in the first quarter of fiscal 2008 reflect increased costs for both L-DOS47 and Topical Interferon Alpha-2b programs with the latter representing the majority of the research and development expenditures in the quarter. Research and development expenditures were split relatively equally amongst the L-DOS47, LSIL and AGW initiatives, with slightly higher expenditures associated with AGW due to the activities to enhance patient enrollment including the expansion of the trial to open study centers in Germany.
Operating, general & administration
Operating, general and administration expenses in the first quarter of fiscal 2009 totaled $1,310,000 (2008 - $1,313,000), for a decrease of $3,000. Higher legal, audit and consulting fees in the first quarter of fiscal 2009 were offset by lower wages due to the one time charge of $434,000 relating to the resignation of the Company’s Chairman in the first quarter of fiscal 2008.
Amortization of intangible and capital assets
Amortization of intangible assets in the first quarter of fiscal 2009 totaled $3,000 (2008 - $7,000). Amortization of capital assets in the first quarter of fiscal 2009 totaled $64,000 (2008 - $66,000).
Stock-based compensation
Stock-based compensation expense in the first quarter of fiscal 2009 totaled $nil (2008 - $12,000). The stock-based compensation expense in the first quarter of fiscal 2008 relates to the ongoing amortization of compensation costs of stock options granted on June 30, 2005, over their vesting period.
Interest income
Interest income in the first quarter of fiscal 2009 totaled $205,000 (2008 - $104,000) and is mainly the result of higher cash balances.
Foreign exchange loss
Foreign exchange losses in the first quarter of fiscal 2009 totaled $150,000 (2008 - $108,000). Foreign exchange losses 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 Euro dollars, which are used to fund clinical trials of Topical Interferon Alpha-2b in Europe. In addition, U.S. dollar purchases of inventory for distribution in Canada also contributed to the foreign exchange loss.
Income taxes
Income tax expense in the first quarter of fiscal 2009 totaled $30,000 (2008 - $32,000). All income taxes are attributable to the Company’s operations in Ireland.
cash flow
Operating activities
Net loss from operations totaled $2,321,000 in the first quarter of fiscal 2009 (2008 - $1,644,000) for an increase of $677,000. Cash used in operating activities in the first quarter of fiscal 2009 totaled $1,618,000 (2008 - $1,643,000) resulting in a decrease of $25,000, despite the higher net loss from operations, and is attributable to changes in non-cash working capital, specifically higher accounts payable and accruals.
Financing activities
Financing activities in the first quarter of fiscal 2009 totaled $9,659,000 (2008 - $nil) and represents the private placement which was completed on October 2, 2008, where the Company issued 6,800,000 units at $1.68 per unit, for gross proceeds of $11,424,000.
Investing activities
Use of cash in investing activities for the in the first quarter of fiscal 2009 totaled $37,000 (2008 - $50,000) and represents capital acquisitions in both comparative quarters.
Liquidity, Capital Resources and outlook
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, 2008, the Company had cash and cash equivalents totaling $26,911,000 (July 31, 2008 - $19,057,000). The increase in cash and cash equivalents in the first quarter of fiscal 2009 is the result of a private placement completed on October 2, 2008 where the Company issued 6,800,000 units at $1.68 per unit, for gross proceeds of $11,424,000. Each unit consists of one common share and one-half 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 $2.36 until 5pm (Toronto time) on October 1, 2011.
The total number of common shares issued as at October 31, 2008 was 53,175,335 (July 31, 2008 - 46,375,335).
At October 31, 2008, the Company’s working capital was $26,534,000 (July 31, 2008 - $19,166,000).
Based on our planned expenditures and assuming no material unanticipated expenses, we believe that our cash reserves and expected cash from operations will be sufficient to meet our anticipated cash needs for working capital and capital expenditures for the next twelve months.
The Company will continue to seek additional funding, primarily by way of equity offerings, to carry out its business plan and to minimize risks to its operations. The market, however, for equity financings for companies such as Helix is challenging, and there can be no assurance that additional funding by way of equity financing 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. 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 Company’s unaudited interim consolidated first quarter fiscal 2009 and 2008 financial statements are summarized below:
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 Topical Interferon Alpha-2b. Helix is listed on the TSX under the symbol “HBP”.
For further information contact:
The Toronto and Frankfurt Stock Exchanges have not reviewed and do not accept responsibility for the adequacy or accuracy of the content of this News Release. Reported financial information may not necessarily be indicative of future operating results or of future financial position, due to a number of risks and uncertainties, including those set forth below. This News Release contains certain forward-looking statements and information regarding the Company’s activities and finances, which statements and information can be identified by the use of forward-looking terminology such as “expects”, “committed to”, “plans”, “designed to”, “potential”, “to become”, “is developing”, “believe”, “intends”, “continues”, “going forward”, “opportunities”, “in anticipation”, “2009", “next”, “toward”, “ongoing”, “pursue”, “to seek”, “to enhance”, 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. Helix’s actual results could differ materially from those anticipated in these forward-looking statements and information as a result of numerous risks and uncertainties including without limitation, uncertainty whether Topical Interferon Alpha-2b or L-DOS47 will be successfully developed and commercialized as a drug or at all; the need for additional clinical trials, the occurrence and success of which cannot be assured; product liability and insurance risks; research and development risks, the risk of technical obsolescence; the need for further regulatory approvals, which may not be obtained in a timely matter or at all; intellectual property risks; marketing/manufacturing and partnership/strategic alliance risks; the effect of competition; uncertainty of the size and existence of a market opportunity for Helix’s products; as well as a description of other risks and uncertainties affecting Helix and its business, as contained in news releases and filings with the Canadian Securities Regulatory Authorities, including its latest Annual Information Form, at www.sedar.com, any of which could cause actual results to vary materially from current results or Helix’s anticipated future results. Forward-looking statements and information are based on the beliefs, opinions 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, opinions or expectations, or other circumstances change, except as required by law.
CONTACT: Investor & Media Relations: Ian Stone, +1-619-814-3510, Fax:
+1-619-955-5318, ian.stone@russopartnersllc.com, or Robert Flamm, Ph.D.,
+1-212-845-4226, robert.flamm@russopartnersllc.com, both of Russo Partners
LLC
