The Concerned Shareholders of Helix BioPharma Corp.

January 23, 2012 22:00 ET

Concerned Shareholders of Helix BioPharma Corp. Announce Level of Support from Shareholders, Look Forward to the January 30, 2012 Shareholder Meeting and Respond to Desperate Move by Incumbents

TORONTO, ONTARIO--(Marketwire - Jan. 23, 2012) - A group of concerned shareholders ("Concerned Shareholders") of Helix BioPharma Corp. ("Helix"), led by Mr. Zbigniew Lobacz, a significant shareholder, announced today the support of shareholders holding approximately 65% of the common shares of Helix who have signed the necessary forms to process their vote for the YELLOW proxies and to effect real and meaningful change on the board of directors of Helix. The Concerned Shareholders look forward to the Annual Meeting of Shareholders on January 30, 2012, so that change can begin.

It is extremely disappointing and deeply troubling to the Concerned Shareholders that Helix and its current board and management continue down the path of making unfounded allegations against members of the Concerned Shareholders in order to entrench themselves at Helix. The Proxy Circular dated January 13, 2012 issued by the Concerned Shareholders (the "Concerned Shareholder Circular") does not contain misrepresentations and omissions as alleged by Helix and its management and current board in today's press release and letter to shareholders. The Concerned Shareholders see these communications as yet another attempt by management and the current board to frustrate or delay the express wishes of a majority of the shareholders who demand change. The Concerned Shareholder Circular describes for shareholders the background that led Mr. Lobacz to take the steps he has taken and provides the views and opinions of Concerned Shareholders on the performance of Helix and the priorities of its management and board. Shareholders who hold a majority of shares of Helix have demonstrated that they agree with Mr. Lobacz about the need to effect change.

As mentioned in the Concerned Shareholder Circular, Mr. Lobacz did not commence his discussions with Helix with the intent to change the whole board but, since incremental changes were resisted, a critical change to the entire board is necessary. Management and the current board have been implementing defensive tactics in an increasingly aggressive effort to prevent or delay shareholders from voting for change. In their most desperate move to date, management of Helix has asked the Special Committee of the current board to postpone the shareholder meeting that has been duly called for Monday January 30, 2012. The Concerned Shareholders have responded to the Special Committee saying that the Concerned Shareholder Circular complies with all applicable laws and does not contain misrepresentations or omissions. As matters presently stand, the shareholder meeting IS going ahead on January 30. However, any postponement would cause serious prejudice to the Concerned Shareholders, the shareholders as a whole and the Corporation. Accordingly, the Concerned Shareholders have told the Special Committee that the meeting should not be postponed. Management should not be expending more of Helix's resources on these entrenchment exercises. The Concerned Shareholders continue to believe these steps show that the priorities and allegiances of the current board are more and more aligned with management and less with shareholders' wishes.

The letter to shareholders from Helix dated today contains many misrepresentations. Some of the most egregious misrepresentations are addressed below, together with the Concerned Shareholders' view of what Helix and its incumbent management and board are attempting to accomplish with these recent communications to shareholders:

  • Baseless Personal Attacks on Concerned Shareholders

The letter to Helix shareholders intimates that the Concerned Shareholders are "self-interested arbitrageurs". The Concerned Shareholders take great offence with this characterization of the investments made by them over a sustained period of time since 2009. The lead shareholder trying to effect change is Mr. Lobacz, who has invested over $14 million in Helix. He is supported by other shareholders who have invested over $49 million in Helix. These shareholders have seen the value of their past investment in Helix jeopardized by what they believe has been mismanagement, and they wish to see a change to the oversight and management by exercising their right to vote on directors. The right to elect directors is the most important right that a shareholder has. The Concerned Shareholders are not "acquiring" control of Helix, they are exercising their rights as shareholders. In the view of Concerned Shareholders, Helix and its current management have stooped to making baseless personal attacks against the Concerned Shareholders because they want to prevent Helix shareholders from exercising their right to vote for change.

The letter suggests that Mr. Lobacz proposed changes to his Helix warrants without consideration of other shareholders. The shareholder proposal that Mr. Lobacz submitted to Helix, which is a matter of public record, asked Helix to extend all of the three-year warrants issued to European shareholders, including a distribution of warrants in which he did not even participate. Mr Lobacz was not looking to benefit himself alone but rather, in his mind, correct the unfair treatment of European shareholders when Helix's management and current board completed dilutive private placements at a discounted price with significant participation by a current director without offering existing shareholders an opportunity to participate on the same terms.

  • Attempts to Confuse, Distract, Delay and Frustrate Shareholders

The Concerned Shareholders are confident that Helix's allegations against certain members of the Concerned Shareholders will be dismissed by the court. The respondents in the proceeding commenced by the Special Committee of the current board will be responding in accordance with a timetable that was agreed to by all parties. The Concerned Shareholders believe that Helix management and its current board have made false accusations against ACM Alpha Consulting Management AG, ACM Alpha Consulting Management Est. and the Kandzioras, and have sponsored the Special Committee's investigation to confuse and distract shareholders from the real issues of Helix's substandard performance and entrenchment exercises and to delay and frustrate the wishes of a majority of shareholders who are not in any way involved in these accusations. The shareholders who executed the voting and support agreements announced on November 8, 2011 continue to support the Concerned Shareholders irrespective of the public campaign by Helix and its management and current board to discredit members of the Concerned Shareholders. Further, the use of Ernst & Young LLP (E&Y) in the Special Committee's investigation appears to be a mechanism for Helix and its management and current board to improperly solicit proxies for their own cause and spread unfounded allegations outside of the court process.

  • Improperly Attacking Concerned Shareholder Circular

The Concerned Shareholder Circular fully complies with all applicable laws and contains the views and opinions of the Concerned Shareholders, which they are entitled to express. There was no misinformation. Helix is also entitled to put out its views and opinions which it has now done in the recent letter to shareholders and press release. Shareholders can decide what the motivation is for Helix, its management and current board to make serious allegations in the press before the court has had a chance to rule on them, before the respondents in the court proceeding have delivered their own evidence, and before the Special Committee has even completed its investigation. In the Concerned Shareholders' opinion, Helix's current management and board are making these allegations in this way as a desperate attempt to entrench themselves in their positions. All the allegations will be dealt with in the court application and should not be used as a reason to delay or frustrate the wishes of a majority of Helix shareholders.

The Concerned Shareholders reinforce their complete confidence and support of the nominees named in the Concerned Shareholder Circular. William B. White, Robert Verhagen, Mario Gobbo, Marek Orlowski and Sebastian Szachowicz have a broad range of experience and expertise in the biopharmaceutical and life sciences industry, public companies, corporate governance, corporate finance, capital markets, mergers and acquisitions and other matters that are critical for Helix to realize its full potential. The Concerned Shareholders believe that, once elected, their director nominees will be catalysts in reversing the continual negative path of Helix and will be in a position to create value for all shareholders.

The Concerned Shareholders urge Helix shareholders to ignore the desperate attempts by management and current board to entrench their positions with Helix. The Concerned Shareholders believe that management and the current board have their priorities in the wrong place.

The Concerned Shareholders' concerns and their proposal for change already have the support of other shareholders who, together with the shares held by the Concerned Shareholders, represent approximately 65% of the issued and outstanding shares of Helix. For those shareholders who have completed the necessary consent forms, nothing further need be done. Notwithstanding this tremendous support, we continue to encourage and invite all other shareholders to vote the YELLOW proxy for our nominees to start Helix back on a positive path.

Helix shareholders are encouraged to contact Phoenix Advisory Partners toll-free at 1-800-254-9280 or if outside North America at 647-351-3085 x229 (collect calls accepted) or by email at inquiries@phoenixadvisorypartners.com with any questions, request for copies of the proxy circular or if they require assistance voting their YELLOW form of proxy.

Copies of the proxy circular prepared by the Concerned Shareholders can be obtained via SEDAR (www.sedar.com)

Certain statements contained in this release constitute forward-looking statements. The words "has", "intend", "plan", "believe", "expect" and similar expressions as they relate to the Concerned Shareholders, the Concerned Shareholder Nominees, the support for the Concerned Shareholders, Helix or its current or future management, board or performance are intended to identify forward-looking statements. The forward-looking statements reflect the Concerned Shareholders' view and are based on understandings and reasonable assumptions, beliefs, opinions and expectations of the Concerned Shareholders at the time they are made. The Concerned Shareholders caution readers of this press release not to place undue reliance on forward-looking statements which are not a guarantee of performance and are subject to a number of uncertainties and other factors that could cause actual results to differ materially from those expressed or implied by such statements. These factors include, but are not limited to, shareholder action, court decisions, the timing of the shareholder meeting, actions by Helix, its management, members of the current board or its special committee or the Chair of the shareholder meeting, unexpected change of control consequences, the status of Helix's assets, financial condition and corporate books and records, general economic and market conditions, changes in the laws, regulatory processes, actions of competitors and the ability to implement business strategies and pursue business opportunities and financing alternatives after a state of uncertainty as well as other risks and uncertainties about Helix's business detailed in Helix's filings with applicable securities commissions copies of which are available at www.sedar.com.

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