AURORA, ON, June 11 Helix-BioPharma-Q3
AURORA, ON, June 11 /PRNewswire-FirstCall/ - Helix BioPharma Corp. (TSX,
FSE: "HBP"), a biopharmaceutical company specializing in the field of cancer
therapy, today announced its product development progress, quarterly
highlights and financial results for the three and nine month periods ended
April 30, 2008.
"During the quarter, we made significant advancements in the development
of our lead clinical compounds," said John Docherty, President of Helix
Biopharma. "We are currently developing plans for Topical Interferon to enter
expanded Phase II/III clinical trials and we are anticipating L-DOS47 entering
the clinic in a Phase I study."
HIGHLIGHTS
The Company's highlights for the quarter included the following events:
Clinical Development
- Helix met with the German Federal Institute for Drugs and Medical
Devices (BfArM) as a preliminiary step toward filing its CTA for a
planned large, randomized, placebo-controlled, double-blind Phase III
European clinical trial of Topical Interferon Alpha-2b in patients
with low-grade cervical lesions ("LSIL");
- Helix received approval from the Swedish Medical Products Agency for
a clinical protocol amendment to expand its Topical Interferon
Alpha-2b AGW clinical trial to sites in Germany;
- The Prominent German dermatologist, Professor Dr. med. Eggert
Stockfleth of the Department of Dermatology, Skin Cancer Center
Charite, Universitatsmedizin Berlin, was engaged by Helix to act as
the German co-ordinating investigator for the expanded AGW clinical
trial in Germany;
GMP Manufacturing
- Contract Pharmaceuticals Limited Niagara was engaged by Helix to
further scale-up the Topical Interferon Alpha-2b GMP production
process in anticipation of conducting clinical trials in the U.S. and
Europe in patients with LSIL;
- Signed a second, more definitive agreement with BioVectra dcl to
further scale-up the GMP production of the L-DOS47 active drug
substance for purposes of producing clinical trial batches.
Investor and Media Relations
- Appointed New York based Russo Partners as both investor and media
relations group.
RESULTS FROM OPERATIONS
Three and nine month periods ended April 30, 2008 compared to the same
period in the previous year
Loss for the period
The Company recorded losses of $1,139,000 and $4,309,000 for the three and
nine month periods ended April 30, 2008, respectively, for a loss per common
share of $0.03 and $0.11, respectively. In the comparative three and nine
month periods ended April 30, 2007, the Company recorded losses of $1,523,000
and $4,765,000, respectively, for a loss per common share of $0.04 and $0.13,
respectively.
Revenues
Total revenues for the three month period ended April 30, 2008 totaled
$1,018,000 compared to $864,000 for the same period in 2007, resulting in an
increase of $154,000 or 17.8%. Total revenues, for the nine month period ended
April 30, 2008 totaled $2,694,000, compared to $2,582,000 for the same period
in 2007, resulting in an increase of $112,000 or 4.3%.
Product Revenue
Product revenue totaled $775,000 and $2,181,000 for the three and nine
month periods ended April 30, 2008, respectively, and represent an increase of
$173,000 (28.7%) and $126,000 (6.1%) when compared to the three and nine month
periods ended April 30, 2007, respectively. Higher revenues, specifically from
the sale of Klean-Prep(TM) in Canada and to a lesser extent Orthovisc(R),
contributed to the higher product revenues in the three month period end April
30, 2008 when compared to the three month period ended April 30, 2007. The
increase in product revenue for the nine month period ended April 30, 2008 is
solely the result of higher Klean-Prep(TM) in Canada offsetting slightly lower
sales of Orthovisc(R) when compared to the nine month period ended April 30,
2007.
License Fees and Royalty Revenue
License fees and royalties totaled $243,000 and $513,000 for the three and
nine month periods ended April 30, 2008 and represent an increase of $129,000
(113.2%) and $134,000 (35.4%) when compared to the three and nine month
periods ended April 30, 2007, respectively. The increase in both the three and
nine month periods ended April 30, 2008 when compared to April 30, 2007
reflects a receipt of royalty in the quarter of US$100,000 from the
sub-licensing of technology to Lumera Corporation.
Research and Development Contract Revenue
Research and development contract revenue totaled $nil respectively for
both the three and nine month periods ended April 30, 2008. For both the three
and nine month periods ended April 30, 2007, research and development contract
revenue totaled $148,000. The research and development contract was completed
in the third quarter ended April 30, 2007.
Cost of sales and margins
Cost of sales totaled $326,000 and $908,000 for the three and nine month
periods ended April 30, 2008 compared with $249,000 and $849,000 for the three
and nine month periods ended April 30, 2007, respectively. Margins, on
percentage basis, have remained relatively stable in both the three and nine
month periods ended April 30, 2008 when compared to the same period in 2007.
Research & development
Research & development costs for the three and nine month periods ended
April 30, 2008 totaled $1,068,000 and $2,879,000 compared with $1,113,000 and
$3,086,000 for the three and nine month periods ended April 30, 2007,
respectively. In the three and nine month periods ended April 30, 2008,
research & development expenditures for both L-DOS47 and Topical Interferon
Alpha-2b were less than in the comparative three and nine month periods ended
April 30, 2007. Higher research and development expenditures for L-DOS47 in
the current quarter were offset by reduced expenditures related to Topical
Interferon Alpha-2b.
L-DOS47
L-DOS37 research and development expenditures have increased in the three
month period ended April 30, 2008 when compared to the three month period
ended April 30, 2007. When compared to the nine month period ended April 30,
2007, research and development expenditures for the nine month period ended
April 30, 2008 related to L-DOS47, have decreased slightly with the decrease
solely being the result of the various stages of completion associated with
the multiple projects within the L-DOS47 program. The Company expects higher
L-DOS47 expenditures going forward into the fourth quarter of fiscal 2008 and
into fiscal 2009 as it continues to progress towards an IND filing for its
planned Phase I study.
Building upon an already successful smaller-scale GMP production program,
Helix has recently signed a second agreement with BioVectra dcl to further
advance GMP production of the L-DOS47 active drug substance to a scale that is
suitable for human clinical testing. In addition, Helix's program with
US-based KBI Biopharma Inc. to develop a process for preparing L-DOS47 in a
lyophilized vial format is nearing completion. While all activities for the
planned Phase I study are progressing, the Company has experienced some delays
with respect to its GMP manufacturing scale-up program, which has impacted its
previously projected timelines. The Company now expects to file its Phase I
IND before the end of Helix's fiscal fourth quarter ending July 31, 2009.
Topical Interferon Alpha-2b
Research and development expenditures related to the Phase II trial in
Sweden for AGW were slightly higher in the three month period ended April 30,
2008 when compared to the three month period ended April 30, 2007. For the
nine month period ended April 30, 2008 the expenditures associated with the
Swedish trial have not met the Company's original projections and is due to a
lower patient enrollment rate. However, the Company expects to increase
spending going forward through to July 31, 2009, as it expands the trial to
include centers in Germany. In light of the recruitment challenges to date,
the Company is revising the time projected to complete patient enrollment to
the end of the Company's fiscal fourth quarter ending July 31, 2009.
Research and development expenditures related to clinical development for
low-grade cervical lesions were lower in the three and nine month period ended
April 30, 2008 when compared to the same periods ended April 30, 2007.
However, the Company expects to increase spending going forward as work
continues to advance towards IND and CTA filings for planned Phase IIb and
Phase III trials in Europe and the U.S. respectively.
Helix's objective is to perform two, parallel confirmatory pivotal
efficacy trials, requiring approximately 400 patients per trial over a
two-year period, intended to support marketing authorizations. Building upon
the completed German Phase II trial, Helix is pursuing a Phase IIb designation
for the U.S. trial, since there has not been any previous clinical experience
with the product in North America, and a Phase III designation for the
European trial. Helix intends to conduct the European trial at centers in
Germany and Austria, and has recently completed a scientific advice meeting
with the German regulatory authority, BfArM, to obtain guidance concerning CTA
preparation and submission. Furthermore, it is Helix's intent to conduct a
small European pharmacokinetic study in human subjects prior to initiating its
planned Phase IIb/III trials in order to gather further evidence of the
product's absorption and elimination profile prior to proceeding with clinical
testing, on a mass scale. Helix intends to conduct a pre-IND meeting with the
U.S. Food and Drug Administration ("FDA") similar to the scientific advice
meeting that the Company has completed with the German regulatory authority,
however, the timing of this meeting has not yet been established.
Moving forward, Helix is advancing its preparations for both IND and CTA
filings and has recently signed an agreement with a U.S. contract
manufacturing organization, Contract Pharmaceuticals Limited Niagara, to
further scale-up the Topical Interferon Alpha-2b GMP production process, in
anticipation of the Phase IIb and III trials in the U.S. and Europe
respectively. Although all activities for the planned Phase IIb/III trials are
progressing, the Company has experienced some delays with the GMP
manufacturing scale-up program and expects further delays as a result of its
intention to perform the pending human pharmacokinetic study before commencing
the planned Phase IIb/III trials. The Company expects both Phase IIb/III
IND/CTA filings to occur before the end of the Company's fiscal fourth quarter
ending July 31, 2009.
Operating, general & administration
Operating, general & administration expenses totaled $1,060,000 and
$3,618,000 respectively for the three and nine month periods ended April 30,
2008 compared to $1,012,000 and $3,459,000 for the three and nine month
periods ended April 30, 2007, respectively.
Slightly higher operating, general and administration expenses for the
three month period ended April 30, 2008, were mainly the result of higher
costs associated with consulting services, investor relations and a royalty
expense incurred in the quarter, all of which, were offset by lower accounting
and audit fees and wages.
For the nine month period ended April 30, 2008, operating, general and
administration expenses were higher due to investor relations, consultancy
services and wages. Offsetting these increases were lower costs associated
with the Company's annual shareholder meeting which was held in the second
quarter of fiscal 2008.
Amortization of intangible and capital assets
Amortization of capital assets in the three and nine month period ended
April 30, 2008 totaled $61,000 and $190,000 respectively, compared to $70,000
and $220,000 for the three and nine month periods ended April 30, 2007,
respectively. Capital asset purchases have been minimal in the nine month
period ended April 30, 2008.
Amortization of intangible assets in the three and nine month periods
ended April 30, 2008 totaled $3,000 and $13,000 respectively, compared to
$40,000 and $119,000 for the three and nine month periods ended April 30,
2007, respectively. The variance is due to certain intangible assets which
have now been fully amortized.
Stock-based compensation
Stock-based compensation expense in the three and nine month periods ended
April 30, 2008 totaled $12,000 and $36,000 respectively compared to $12,000
and $36,000 for the three and nine month periods ended April 30, 2007,
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
Interest income in the three and nine month periods ended April 30, 2008
totaled $180,000 and $465,000 respectively, compared to $127,000 and $371,000
for the three and nine month periods ended April 30, 2007, respectively. The
increase in interest income is the result of higher cash balances.
Foreign exchange gain
The Company realized foreign exchange gains in the three and nine month
periods ended April 30, 2008 of $220,000 and $265,000, respectively compared
with a $1,000 loss and a $126,000 gain in the same periods ending April 30,
2007, respectively. The foreign exchange gain mainly reflects the foreign
exchange translation of the Company's net assets in Europe, which consist
mainly of Euro dollar denominated cash and cash equivalents.
Income taxes
Income tax expense in the three and nine months ended April 30, 2008
totaled $27,000 and $89,000, respectively, compared to $17,000 and $75,000 for
the same periods ending April 30, 2007, respectively. All income taxes are
attributable to the Company's operations in Ireland.
CASH FLOW
Operating activities
For the three month period ended April 30, 2008 and 2007, cash used in
operating activities totaled $2,167,000 and $1,874,000 respectively. For the
nine month period ended April 30, 2008, cash used in operations was relatively
unchanged when compare to the nine months ended April 30, 2007.
Financing activities
Financing activities in the three and nine month periods ended April 30,
2008 totaled $nil and $14,614,000, respectively, compared to $nil and
$6,480,000 for the same periods ended April 30, 2007. All financing activities
relate to separate private placements in the given periods.
Investing activities
Use of cash in investing activities for the three and nine month periods
ended April 30, 2008 as well as the three month period ended April 30, 2007
totaled $42,000, $101,000 and $12,000 respectively. For the nine month period
ended April 30, 2007 investing activities were a source of cash totaling
$6,602,000 of which $6,640,000 represents the redemption of short-term
investments. Excluding the redemption of short-term investments, all use of
funds in investing activities represents capital acquisitions in the
particular period.
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, interest
income on 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 Company's ongoing research and
development programs.
At April 30, 2008, the Company had cash and cash equivalents totaling
$21,274,000 compared to $11,379,000 as of July 31, 2007. The increase in cash
and cash equivalents is the result of a private placement completed on
December 19, 2007 where the Company issued 10,040,000 common shares for gross
proceeds totaling $16,867,200. The total number of common shares issued as of
April 30, 2008 was 46,375,335 compared to 36,335,335 as of July 31, 2007.
At April 30, 2008, the Company's working capital was $21,911,000 (July 31,
2007 - $11,468,000). After taking into consideration the Company's anticipated
revenue, planned research and development expenditures and assuming no
unanticipated expenses, the Company expects that its current working capital
will be sufficient to finance operations through to the end of the 2010 fiscal
year.
The Company will continue to seek additional funding, primarily by way of
equity offerings to carry out its business plan and to minimize risks to its
operations. The market, however, for equity financings for companies such as
Helix is challenging, and there can be no assurance that additional funding by
way of equity financing will be available. The failure of the Company to
obtain additional funding on a timely basis may result in the Company reducing
or delaying one or more of its planned research, development and marketing
programs and reducing related personnel, any of which could impair the current
and future value of the business. Any additional equity financing, if secured,
may result in significant dilution to the existing shareholders at the time of
such financing. The Company may also seek additional funding from other
sources, including technology licensing, co-development collaborations, and
other strategic alliances, which, if obtained, may reduce the Company's
interest in its projects or products. There can be no assurance, however, that
any alternative sources of funding will be available.
The Company's unaudited interim consolidated balance sheet as at April 30,
2008, and audited consolidated balance sheet as at July 31, 2007, are
summarized below:
-------------------------------------------------------------------------
Consolidated Balance Sheets as at
($ thousands)
(audited)(audited)
30-Apr31-Jul 30-Apr31-Jul
2008 2007 2008 2007
------------------- -------------------
Current
Current assets:liabilities:
Cash and cash Accounts
equivalents 21,27411,379 payable 497 565
Accounts Accrued
receivable 851 902 liabilities 665 974
Inventory 548 539 -------------------
Prepaid and1,162 1,539
other 400 187
-------------------
23,07313,007
Non current Shareholders'
assets 1,239 1,266equity 23,15012,734
------------------- -------------------
24,31214,273 24,31214,273
------------------- -------------------
------------------- -------------------
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The Company's unaudited interim Consolidated Statements of Operations and
Cash Flows for the three and nine month periods ended April 30, 2008 and 2007
are summarized below:
-------------------------------------------------------------------------
Consolidated Statements of Operations
for the three and nine month periods ended April 30, 2008 and 2007
(thousand $, except for per share data)
Three months Nine months
ended April 30 ended April 30
2008 2007 2008 2007
-----------------------------------------
Revenue:
Product revenue 775 602 2,181 2,055
License fees and royalties 243 114 513 379
Research and development
contracts - 148 - 148
-----------------------------------------
1,018 864 2,694 2,582
Expenses:
Cost of sales326 249 908 849
Research and development 1,068 1,113 2,879 3,086
Operating, general and admin 1,060 1,012 3,618 3,459
Amortization of capital assets6170 190 220
Amortization of intangible
assets34013 119
Stock-based compensation 12123636
Interest income, net(180) (127) (465) (371)
Foreign exchange loss (220)1 (265) (126)
-----------------------------------------
2,130 2,370 6,914 7,272
Loss before income taxes(1,112) (1,506) (4,220) (4,690)
Income taxes27178975
-----------------------------------------
Loss for the period (1,139) (1,523) (4,309) (4,765)
-----------------------------------------
-----------------------------------------
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Loss per share:
Basic(0.03)(0.04)(0.11)(0.13)
Diluted (0.03)(0.04)(0.11)(0.13)
-------------------------------------------------------------------------
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Consolidated Statements of Cash Flows
for the three and nine month periods ended April 30, 2008 and 2007
(thousand $)
Three months Nine months
ended April 30 ended April 30
2008 2007 2008 2007
-----------------------------------------
Cash provided by (used in):
Loss for the period (1,139) (1,523) (4,309) (4,765)
Items not involving cash:
Amortization of capital
assets 6170 190 220
Amortization of intangibles 34013 119
Stock-based compensation12123636
Foreign exchange loss (220)1 (265) (126)
-----------------------------------------
(1,283) (1,400) (4,335) (4,516)
Change in non-cash working
capital(884) (474) (548) (116)
-----------------------------------------
Operating activities(2,167) (1,874) (4,883) (4,632)
Financing activities - -14,614 6,480
Investing activities (42) (12) (101)6,602
Effect of exchange rate changes
on cash 220(1) 265 126
-----------------------------------------
Increase in cash(1,989) (1,887)9,895 8,576
Cash:
Beginning of the period 23,26314,85511,379 4,392
-----------------------------------------
End of the period 21,27412,96821,27412,968
-----------------------------------------
-----------------------------------------
-------------------------------------------------------------------------
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 Topical
Interferon Alpha-2b and its novel L-DOS47 new drug candidate. Helix is listed
on the TSX under the symbol "HBP".
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 future activities and finances, and in particular, its planned
clinical trials, which statements and information can be identified by the use
of forward-looking terminology such as "moving forward", "future",
"anticipation", "planned", "expects", "intends", "continue", "pursuing",
"developing", or variations thereon, 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.
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; uncertainty whether any
of the planned Topical Interferon Alpha-2b or L-DOS47 clinical trials referred
to in this press release will be approved, undertaken, or completed as planned
or will achieve anticipated results; 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, including the possibility that patent
applications may not result in issued patents, that issued patents may be
circumvented or challenged and ultimately struck down, that any upcoming
expiry of an issued patent may negatively impact the further development or
commercialization of the underlying technology, and that the Company may not
be able to protect its trade secrets or other confidential proprietary
information; 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 availability of raw
materials, and in particular, cGMP grade materials, on acceptable terms or at
all; the risk that the Company's license optionee for Topical Interferon
Alpha-2b may not continue to provide the Company with interferon alpha-2b or
exercise its option, which would have a material adverse effect on the drug's
further development and commercialization; 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.
SOURCE Helix BioPharma Corp.
