AURORA, ON, June 13 /PRNewswire-FirstCall/ - Helix BioPharma Corp. today announced financial results for the third quarter of fiscal 2007, ended April 30, 2007.
HIGHLIGHTS ---------- - Awarded first U.S. patent for DOS47, a broad anti-cancer therapeutic candidate - Announced positive Phase II clinical results with Topical Interferon Alpha-2b in patients with human papilloma virus (“HPV”) induced low-grade squamous intraepithelial lesions (“LSIL”) - Signed L-DOS47 manufacturing agreement with Biovectra DCL - Presented L-DOS47 findings at Keystone Symposia meeting, “Antibodies as Drugs: From Basic Biology to Clinic” - Presented L-DOS47 findings at the fourth international conference on “Tumour Microenvironment” in Florence, Italy RESULTS FROM OPERATIONS Three and nine month period ended April 30, 2007 and comparative periods for the previous year
The Company recorded a loss of $1,523,000 and $4,765,000 respectively for the three and nine month periods ended April 30, 2007 for a loss per common share of $0.04 and $0.13, respectively. In the comparative three and nine month periods ended April 30, 2006, the Company recorded a loss $1,360,000 and $4,122,000 respectively for a loss per common share of $0.04 and $0.13, respectively.
Total revenues for the three month period ended April 30, 2007 were $864,000 (2006 - $1,099,000), resulting in a decrease of $235,000 or 21.4%. Total revenues, on a year-to-date basis were $2,582,000 (2006 - $3,110,000), resulting in a decrease of $528,000 or 17.0%. Lower product revenues from the sale of Orthovisc(R) and no license fee revenue from the Company’s biochip technology resulted in lower overall revenues for both the three and nine month periods ended April 30, 2007.
Cost of sales totalled $249,000 and $849,000 respectively for the three and nine month periods ended April 30, 2007 (three and nine month periods ended April 30, 2006: $284,000 and $1,039,000 respectively). Though overall margins were maintained, lower margins from sales of Orthovisc(R) product were offset by favourable Canadian dollar exchange rates versus the US dollar on purchases of Orthovisc(R).
Research & development costs totalled $1,113,000 and $3,086,000 respectively for the three and nine month periods ended April 30, 2007 (three and nine month periods ended April 30, 2006: $1,065,000 and $2,496,000 respectively). In both the three and nine month periods ended April 30, 2007, the majority of research & development expenditures were allocated towards the Company’s L-DOS47 project and patient enrollment for the Topical Interferon Alpha-2b Phase II trial in Sweden. In addition to the aforementioned, the Company is assessing the next steps from the positive outcome of the German Phase II clinical study and therefore expects research and development expenditures to increase in future quarters.
Operating, general & administration expenses totalled $1,012,000 and $3,459,000 respectively for the three and nine month periods ended April 30, 2007 (three and nine month periods ended April 30, 2006: $1,086,000 and $2,838,000 respectively). In the three month period ended April 30, 2007, lower sales commissions from lower product revenues in Canada, in addition to lower wages, travel and marketing promotional expenditures were partially offset by higher Director’s and Officers insurance premiums, accounting and consulting services.
In addition to those items impacting operating, general and administration expenditures in the third quarter, a shareholder proxy dispute related to the Company’s annual shareholder meeting held on January 23, 2007, significantly increased operating general and administrative expenditures on a year-to-date basis.
Amortization of intangible assets in the three and nine month periods ended April 30, 2007 totalled $40,000 and $119,000 respectively (three and nine month periods ended April 30, 2006: $40,000 and $555,000 respectively). The variance is due to a certain intangible asset which is now fully amortized.
Amortization of capital assets in the three and nine month period ended April 30, 2007 totalled $70,000 and $220,000 respectively (three and nine month periods ended April 30, 2006: $78,000 and $237,000 respectively). Capital asset purchases have been minimal in the nine month period ended April 30, 2007.
Stock-based compensation expense in the three and nine month periods ended April 30, 2007 totalled $12,000 and $36,000 respectively (three and nine month periods ended April 30, 2006: $12,000 and $68,000 respectively). The stock-based compensation expense relates to the ongoing amortization of compensation costs of stock options granted on June 30, 2005, over their vesting period.
Interest income in the three and nine month periods ended April 30, 2007 totalled $127,000 and $371,000 respectively (three and nine month periods ended April 30, 2006: $77,000 and $176,000 respectively). The increase in interest income is the result of higher cash balances.
The Company realized a foreign exchange loss in the three month period ended April 30, 2007 of $1,000 while on a year-to-date basis, the Company realized foreign exchange gains of $126,000. In the comparative three and nine month periods ended April 30, 2006, the Company realized foreign exchange gains of $45,000 and foreign exchange losses of $99,000, respectively. Foreign exchange movement for the three month period ended April 30, 2007 remained stable. For the nine month period ended April 30, 2007, the appreciation of the Euro only partially offset the appreciation of the Canadian dollar versus the US dollar. The net assets of the Company’s integrated foreign operation in Europe consist mainly of cash, denominated in Euros, which are used to fund its Phase II Topical Interferon Alpha-2b clinical program in Europe.
Income tax expense in the three and nine months ended April 30, 2007 totalled $17,000 and $75,000 respectively (three and nine month periods ended April 30, 2006: $16,000 and $76,000 respectively). All income taxes are attributable to the Company’s operations in Ireland.
CASH FLOW
The loss in the three and nine month periods ended April 30, 2007 totalled $1,523,000 and $4,765,000 respectively (three and nine month periods ended April 30, 2006: $1,360,000 and $4,122,000 respectively). Adjusting for items not involving cash and non-cash working capital items, the cash used in operations for the three and nine month periods ended April 30, 2007 totalled $1,871,000 and $4,616,000 respectively (three and nine month periods ended April 30, 2006: $894,000 and $2,871,000 respectively).
Costs associated with a shareholder proxy dispute related to the Company’s annual shareholder meeting held on January 23, 2007 in addition to lower revenues, higher research and development expenditures and inventory increased the cash used in operating activities for both the three and nine month periods ended April 30, 2007.
Debt repayment of $3,000 represented the entire use of funds in the three month period ended April 30, 2007. In the nine month period ended April 30, 2007, in addition to debt repayment totalling $16,000 the Company completed a private placement for net proceeds of $6,480,000.
Debt repayment of $4,000 along with $8,000 in proceeds from the exercising of options resulted in a net source of funds of $4,000 in the three month period ended April 30, 2006. For the nine month period ended April 30, 2006 financing activities totalled $8,795,000 and represented a source of financing from the completion of two separate private placements.
Investing activities in the three and nine month periods ended April 30, 2007 represent capital purchases of $12,000 and $38,000 respectively (three and nine month periods ended April 30, 2006: $55,000 and $99,000 respectively). In addition, redemptions of short-term investments in the three and nine month periods ended April 30, 2007 totalled $nil and $6,640,000 respectively. For the three and nine month periods ended April 30, 2006, the Company invested excess funds in short term investments totaling $6,579,000 and $4,109,000, respectively. When appropriate, the Company maintains excess funds in short term investments and redeems these funds as required for its daily operating requirements.
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, interest income on funds available for investment, government grants, investment tax credits and revenues from distribution, licensing and contract services. The Company did not raise any capital during the three month period ended April 30, 2007.
On April 30, 2007, the Company had cash and cash equivalents, along with short-term investments totalling $12,968,000 (July 31, 2006 - $11,032,000). The total number of common shares issued as at April 30, 2007 was 36,335,335 (July 31, 2006 - 36,335,335).
After taking into consideration the costs related to the shareholder proxy dispute in the second quarter of fiscal 2007, anticipated revenue from the Helsinn-Birex license, planned expenditures for research and development for the Phase II clinical study of the Company’s Topical Interferon Alpha-2b, research expenditures relating to the Company’s novel anti-cancer therapeutic, L-DOS47, and reduced revenue forecasts for Orthovisc(R) and assuming no unanticipated expenses, the Company believes its working capital is still sufficient to finance operations to July 2008. 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 or delaying 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 financial statements for the three and nine month periods April 30, 2007 and 2007 are summarized below:
------------------------------------------------------------------------- Consolidated Balance Sheets as at ($ thousands) 30-Apr 31-Jul 2007 2006 ---------------- Current assets: Cash and cash equivalents 12,968 4,392 Short-term investments - 6,640 Accounts receivable 626 878 Inventory 576 418 Prepaid and other 110 160 ---------------- 14,280 12,488 Non current assets 2,680 2,981 ---------------- 16,960 15,469 ---------------- ---------------- 30-Apr 31-Jul 2007 2006 ---------------- Current liabilities: Accounts payable & accruals 1,328 1,572 Long-term debt -current portion - 16 ---------------- 1,328 1,588 Long term debt - - Shareholders’ equity 15,632 13,881 ---------------- 16,960 15,469 ---------------- ---------------- ------------------------------------------------------------------------- Consolidated Statements of Operations (unaudited) for the three and nine month periods ended April 30, 2007 and 2006 (thousand $, except for per share data) Three months Nine months ended April 30, ended April 30, 2007 2006 2007 2006 -------------------------------- Revenue: Product revenue 602 665 2,055 2,309 License fees and royalties 114 333 379 621 Research and development contracts 148 101 148 180 -------------------------------- 864 1,099 2,582 3,110 Expenses: Cost of sales 249 284 849 1,039 Research and development 1,113 1,065 3,086 2,496 Operating, general and admin 1,012 1,086 3,459 2,838 Amortization of intangibles 40 40 119 555 Amortization of capital assets 70 78 220 237 Stock-based compensation 12 12 36 68 Interest income, net (127) (77) (371) (176) Foreign exchange loss 1 (45) (126) 99 -------------------------------- 2,370 2,443 7,272 7,156 Loss before income taxes (1,506) (1,344) (4,690) (4,046) Income taxes 17 16 75 76 -------------------------------- -------------------------------- Loss for the period (1,523) (1,360) (4,765) (4,122) -------------------------------- -------------------------------- ---------------------------------------------------------------------- Loss per share: Basic (0.04) (0.04) (0.13) (0.13) Diluted (0.04) (0.04) (0.13) (0.13) ---------------------------------------------------------------------- ------------------------------------------------------------------------- ------------------------------------------------------------------------- Consolidated Statements of Cash Flows (unaudited) for the three and nine month periods ended April 30, 2007 and 2006 (thousand $) Three months Nine months ended April 30, ended April 30, 2007 2006 2007 2006 -------------------------------- Cash provided by (used in): Loss for the period (1,523) (1,360) (4,765) (4,122) Items not involving cash: Amortization of capital assets 70 78 220 237 Amortization of intangibles 40 40 119 555 Stock-based compensation 12 12 36 68 Foreign exchange loss 1 (45) (126) 99 -------------------------------- (1,400) (1,275) (4,516) (3,163) Change in non-cash working capital (471) 381 (100) 292 -------------------------------- Operating activities (1,871) (894) (4,616) (2,871) Financing activities (3) 4 6,464 8,795 Investing activities (12) (6,634) 6,602 (4,208) Effect of exchange rate changes on cash (1) 45 126 (99) -------------------------------- Increase in cash (1,887) (7,479) 8,576 1,617 Cash: Beginning of the period 14,855 13,226 4,392 4,130 -------------------------------- End of the period 12,968 5,747 12,968 5,747 -------------------------------- -------------------------------- -------------------------------------------------------------------------
The Company’s unaudited interim consolidated financial statements and management’s discussion and analysis of financial condition and results of operations are being 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 Topical Interferon Alpha-2b and its novel L-DOS47 new drug candidate. Helix is listed on the TSX under the symbol “HBP”.
This News Release contains certain forward-looking statements and information regarding the Company’s activities and finances, including anticipated revenues, expenditures and sufficiency of working capital, which statements can be identified by the use of forward-looking terminology such as “next steps”, “expects”, “forecasts”, “anticipated”, “planned”, “believes”, “developing”, or variations thereon, or that events “may”, “can”, “should” or “will” occur, or comparable terminology referring to future events or results. Forward-looking statements and information are statements and information about the future and are inherently uncertain, and Helix’s actual results could differ materially from those anticipated in these forward-looking statements and information as a result of numerous factors, including without limitation, uncertainty of the Phase II German study; uncertainty whether the Swedish clinical trial will be completed as proposed or at all; uncertainty whether the trial results will show efficacy and safety of Topical Interferon Alpha-2b as anticipated or at all; the need for additional clinical trials, the occurrence and success of which cannot be assured; product liability and insurance risks; research & 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; uncertainty as to whether the Company’s products will be successfully commercialized, or at all; exchange rate fluctuations; the need for customer performance; the risk of unanticipated expenses and/or reductions in revenue; Helix’s need for additional future capital, which may not be available in a timely manner or at all; as well as a description of other risks and uncertainties affecting Helix and its business, as contained in Helix’s latest Annual Information Form and other filings with the Canadian Securities Regulatory Authorities 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.
Helix BioPharma Corp.
CONTACT: Investor Relations, Christina Bessant, The Equicom Group Inc.,Tel: (416) 815-0700 ext. 269, (800) 385-5451, Fax: (416) 815-0080, Email:cbessant@equicomgroup.com; Media Relations, Matthew Haines, Russo PartnersLLC., Tel: (212) 845-4235, Fax: (212) 845-4260, Email:matthew.haines@russopartnersllc.com, www.russopartnersllc.com
