Helix BioPharma Corp. Announces Fiscal 2008 Results



    AURORA, Ontario, Oct. 28 /CNW/ -- Helix BioPharma Corp. (TSX, FSE: "HBP")
today announced financial results for the year ended July 31, 2008.
    

    
    During the 2008 fiscal year, the Company continued to make progress with
its development initiatives for its lead drug candidates, L-DOS47 and Topical
Interferon Alpha-2b.  The following are selected highlights during the 2008
fiscal year and subsequent to year-end.
    


    KEY HIGHLIGHTS

    --  DOS47/L-DOS47
        --  Signed an agreement with a fill/finish provider to perform vial
            packaging of L-DOS47 for clinical testing.
        --  Signed an agreement with a company specializing in lyophilization
            (freeze-drying) to develop the L-DOS47 vial packaging format
        --  Signed a second, more definitive agreement with our L-DOS47 active
            drug substance and bulk drug product manufacturer to further scale
            up the GMP production process in preparation for clinical testing.
        --  Awarded a second U.S. patent protecting the use of targeted
            DOS47-based therapeutics, such as L-DOS47, in combination
            therapeutic regimens with certain chemotherapeutic agents
    --  Topical Interferon Alpha-2b
        --  Received regulatory approval to open sites in Germany for the
            ongoing Phase II clinical trial in patients with ano-genital
warts.
        --  Conducted meetings with German regulators as a preliminary step
            towards filing a CTA for a planned, large, randomized,
            placebo-controlled, double-blind Phase III European clinical trial
            in patients with low-grade cervical lesions.
        --  Signed an agreement to further scale up the production of Topical
            Interferon Alpha-2b in anticipation of conducting the planned
            European Phase III clinical trial in patients with low-grade
            cervical lesions, as well as to support the planned parallel,
            confirmatory U.S. Phase IIb clinical trial for this indication.
    --  Financing
        --  Completed a private placement financing on December 19, 2007 for
            gross proceeds of $16,867,200.
        --  Completed a private placement financing on October 2, 2008 for
            gross proceeds of $11,424,000.
    --  Other
        --  Appointed W. Thomas Hodgson to the Board of Directors.
        --  Subsequent to the year-end, Lumera Corporation gave notice to its
            termination of the biochip sub-license agreement, to be effective
            December 19, 2008.

    
    For fiscal 2008, the Company recorded a net loss of $6,964,000, which
represents a decrease of $710,000 when compared to fiscal 2007. The net loss
per common share for fiscal 2008 was $0.16 and represents a decrease of $0.06
in loss per common share when compared to fiscal 2007.
    

    
    Product revenue along with license fees and royalties contributed to the
increase in revenue in fiscal 2008 when compared to fiscal 2007 while research
and development contract revenue were nil in fiscal 2008 and therefore lower
than fiscal 2007.
    

    
    Overall expenses in fiscal 2008 were lower than in fiscal 2007.  Higher
interest income and foreign exchange gains in fiscal 2008 offset higher
research and development expenditures and operating, general and
administrative expenditures and a one time write down of intangible assets in
fiscal 2007.
    


    FINANCIAL REVIEW
    
    Total revenues in fiscal 2008 were $3,591,000 and represent an increase
of $167,000 or 4.9% when compared to total revenues in fiscal 2007 of
$3,424,000.  Product revenue along with license fees and royalties contributed
to the increase in revenue in fiscal 2008 when compared to fiscal 2007 while
research and development contract revenue were nil in fiscal 2008 and
therefore lower than fiscal 2007.
    

    
    Product revenue in fiscal 2008 totaled $2,952,000 and represents an
increase of $188,000 or 6.8% when compared to product revenue in fiscal 2007
of $2,764,000.  Product sales of Klean-Prep(TM) continued to grow in fiscal
2008 and more than offset lower sales of Orthovisc(R) in Canada.
    

    
    License fees and royalties in fiscal 2008 totaled $639,000 and represent
an increase of $127,000 or 24.8% when compared to fiscal 2007. The increase is
mainly the result of a milestone payment from the sub-licensing arrangement of
the Company's biochip technology to Lumera Corporation.  Lumera has now given
notice of its termination of the sub-license effective December 19, 2008.
    

    
    Research and development contract revenue in fiscal 2008 totaled $nil and
represents a decrease of $148,000 when compared to fiscal 2007.  The Company
completed a research and development contract in the third quarter of fiscal
2007 and currently has no plans to contract its research and development
services out to third parties, but instead is focusing its resources on the
development of two product candidates: L-DOS47 and Topical Interferon
Alpha-2b.
    

    
    Cost of sales in fiscal 2008 and 2007 totaled $1,239,000 and $1,139,000,
respectively. As a percentage of product revenues, cost of sales in fiscal
2008 and 2007 were 42.0%, 41.2%, respectively. The Canadian dollar's strength
over the last three fiscal years has moderated in fiscal 2008 and was range
bound, reflecting slight higher cost of sales.
    

    
    Research and development expenditures in fiscal 2008 totaled $5,064,000
and represent an increase of $948,000 or 23.0% when compared to fiscal 2007.
Both Topical Interferon Alpha-2b and DOS47 reflect an increase of 20.6% and
25.0%, respectively.  The increase in DOS47 research and development
expenditures reflect advancing preclinical costs in preparation for L-DOS47
pre-IND meetings and a Phase I IND filing to occur sometime before the end of
Helix's fiscal fourth quarter ending July 31, 2009.  The increase in research
and development expenditures related to Topical Interferon Alpha-2b reflect
additional costs in preparation to open additional sites in Germany for the
AGW clinical trial and the expected Phase IIb/III IND/CTA filings for LSIL to
occur before the end of the Company's fiscal fourth quarter ending July 31,
2009.
    

    
    Operating, general and administration expenses in fiscal 2008 totaled
$4,757,000 and represent an increase of $339,000 or 7.7% when compared to
fiscal 2007.  Operating, general and administration expenses reflect higher
audit and consulting fees and a one time charge of $434,000 relating to the
resignation of the Company's Chairman.  Offsetting these cost were lower
marketing promotional costs and legal fees associated with the 2008 Annual
General Meeting.
    

    
    Amortization of intangible assets in fiscal 2008 totaled $16,000 and
represented a decrease of $143,000 when compared to fiscal 2007. Certain
intangible assets were fully amortized in fiscal 2007 and prior, resulting in
the lower amortization expense in fiscal 2008 and on a go forward basis. 
Amortization of capital assets in fiscal 2008 decreased marginally when
compared to fiscal 2007.
    

    
    Stock-based compensation expense in fiscal 2008 totaled $44,000 and
represents a decrease of $3,000 when compared to fiscal 2007. The Company did
not issue any stock options in fiscal 2008 and the stock-based compensation
expense during the year represents the ongoing amortization of compensation
costs of stock options granted on June 30, 2005, over their vesting period.
    

    
    Interest income totaled $645,000 in fiscal 2008 and $496,000 in 2007. The
increase is mainly the result of higher on hand cash balances in fiscal 2008
versus fiscal 2007.
    

    
    The Company realized a foreign exchange gain of $327,000 in fiscal 2008,
which compares favorably to the foreign exchange gain of $9,000 which was
realized in fiscal 2007.  The Canadian dollar's strength over the last three
fiscal years has moderated in fiscal 2008 and was range bound while the Euro
dollar appreciated against all currencies.  The net assets in Europe consist
mainly of cash and cash equivalents, denominated in Euro dollars and are used
to fund clinical trials of the Topical Interferon Alpha-2b in Europe.
    

    
    Impairment of intangible assets totaled $nil in fiscal 2008 and
$1,332,000 in fiscal 2007.  The Company believed future cash flows may not
exceed the carrying value of its biochip technology and in fiscal 2007
recorded an impairment of its biochip technology.
    

    
    Income tax expenses totaled $153,000 in fiscal 2008 and $105,000 in
fiscal 2007. Income taxes are attributable to the Company's operations in
Europe where royalty revenue remained flat on a year over year basis.
    

    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, on 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 July 31, 2008, 2007 and 2006, the Company had cash and cash
equivalents totaling $19,057,000, $11,379,000 and $4,392,000 respectively. The
increase in cash and cash equivalents is the result of several rounds of
private placements. In fiscal 2007, the Company completed a private placement
issuing 3,650,000 units at $1.93 per unit, for gross proceeds of $7,044,500. 
Each unit consisted of one common share and one common share purchase warrant.
 The common share purchase warrants expired, unexercised on March 31, 2008. 
In fiscal 2008, the Company completed another private placement issuing
10,040,000 common shares at $1.68 per common share, for gross proceeds of
$16,867,200.
    

    
    At July 31, 2008, 2007 and 2006, the total number of common shares issued
and outstanding was 46,375,335, 36,335,335 and 32,685,335, respectively, and
the Company's working capital was $19,144,000, $11,468,000 and $10,900,000,
respectively.
    

    
    On October 2, 2008, the Company announced the completion of a private
placement, issuing 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 one common share at a price of $2.36 until October 1, 2011.
    

    
    Based on our planned expenditures and assuming no 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 12 months.  The Company has no external sources of
liquidity such as lines of credit.  At present, the Company considers that it
will be necessary to conclude one or more debt or equity financings in the
near term to be able to continue with its existing business plan.  There can
be no assurance that any such financing will be available on acceptable terms
or at all.
    

    
    The Company's consolidated fiscal 2008, 2007 and 2006 financial
statements are summarized below:
    


    

    
    Consolidated Statements of Operations
    (thousand $, except for per share data)
    ---------------------------------------
    

    
                                    2008     2007     2006
                                  ------------------------
    Revenue:
      Product revenue              2,952    2,764    3,012
       License fees & royalties      639      512      773
       Research and
        Development contracts          -      148      180
                                  ------------------------
                                   3,591    3,424    3,965
    

    
    Expenses:
      Cost of sales                1,239    1,139    1,341
      Research and development     5,064    4,116    3,368
      Operating, general
       and admin                   4,757    4,418    3,722
      Amortization of
       intangibles                    16      159      594
      Amortization of
       capital assets                254      287      315
      Stock-based compensation        44       47    1,710
      Interest income               (645)    (496)    (270)
      Foreign exchange
       loss (gain)                  (327)      (9)      16
      Impairment of intangibles        -    1,332        -
                                  ------------------------
                                  10,402   10,993   10,796
    

    
     Loss before income taxes     (6,811)  (7,569)  (6,831)
    

    
    Income taxes                     153      105      108
                                  ------------------------
    Loss for the year             (6,964)  (7,674)  (6,939)
                                  ========================
    

    
             Loss per share:
               Basic               (0.16)   (0.22)   (0.22)
               Diluted             (0.16)   (0.22)   (0.22)
    



    
    Consolidated Statements of Cash Flows (thousand $)
    --------------------------------------------------
    

    
                                    2008     2007     2006
                                  ------------------------
    Cash provided by (used in):
    

    
    Loss for the year             (6,964)  (7,674)  (6,939)
    

    
    Items not involving cash:
      Amortization of
       capital assets                254      287      315
      Amortization of intangibles     16      159      594
      Stock-based compensation        44       47    1,710
      Impairment of intangibles        -    1,332        -
      Foreign exchange
       loss (gain)                  (327)      (9)      16
                                  ------------------------
                                  (6,977)  (5,858)  (4,304)
    

    
    Change in non-cash
     working capital                 (20)    (221)     202
                                  ------------------------
    Operating activities          (6,997)  (6,079)  (4,102)
    

    
    Financing activities          14,614    6,480    8,808
    

    
    Investing activities            (266)   6,577   (4,428)
    

    
    Effect of exchange rate
     changes on cash and
     cash equivalents                327        9      (16)
                                  ------------------------
    Cash and cash equivalents:
     Increase in the year          7,678    6,987      262
    

    
     Beginning of the year        11,379    4,392    4,130
                                  ------------------------
     End of the year              19,057   11,379    4,392
                                  ========================
    



    
    Consolidated Balance Sheets (thousand $)
    

    
                                     2008     2007
                                   ---------------
    Current assets:
     Cash and cash equivalents     19,057   11,379
     Accounts receivable              349      902
     Inventory                        458      539
     Prepaid and other                446      187
                                   20,310   13,007
    Non current assets              1,356    1,266
                                   21,666   14,273
    


    
                                     2008     2007
                                   ---------------
    Current liabilities:
     Accounts payable                 598      565
     Accrued liabilities              546      974
                                    1,144    1,539
    

    
    Shareholders' equity           20,522   12,734
                                   21,666   14,273


    
    The Company's complete 2008 Consolidated Financial Statements,
Management's Discussion and Analysis and Annual Information Form 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".
    

    For further information contact:
    

    
    Investor & Media Relations
    Ian Stone
    Russo Partners LLC
    Tel: (619) 814-3510
    Fax: (619) 955-5318
    Email: ian.stone@russopartnersllc.com
    


    
    David Schull
    Russo Partners LLC
    Tel: (212) 845-4271
    Email: david.schull@russopartnersllc.com
    

    
    www.russopartnersllc.com

    
    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
anticipated developments in the Company's business and the sufficiency of the
Company's cash reserves and expected cash flow from operations, which
statements and information can be identified by the use of forward-looking
terminology such as "to perform", "to develop", "in preparation for", "in
anticipation of",  "to open", "step towards", "planned", "believes", 
"expected", "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, the Company's
need for additional capital, which may not be available in a timely manner or
at all and which, if not obtained, will have a material adverse impact on the
Company and its ability to continue; 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 planned clinical
trials will occur as expected or whether such trials, as well as the ongoing
clinical trial in Sweden and Germany, will be successful; 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.
    



    




For further information:

For further information: Ian Stone, +1-619-814-3510, Fax:
+1-619-955-5318, ian.stone@russopartnersllc.com, or David Schull,
+1-212-845-4271, david.schull@russopartnersllc.com, both of Russo Partners
LLC

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HELIX BIOPHARMA CORP.

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