AURORA, ON--(Marketwired - Oct 29, 2013) - Helix BioPharma Corp. (
HIGHLIGHTS
The following are selected highlights during the 2013 fiscal year and subsequent to year-end:
- Announced receipt, on October 28, 2013, of subscription agreements for net proceeds in excess of $4,600,000. The terms of the private placement are for the purchase of common shares at $1.15 per share and include one warrant per share at an exercise price of $1.61 and have an expiry of five years from the date of issue. The completion of the private placement is subject to approval by the Toronto Stock Exchange;
- Completed first patient enrollment and dose administration in addition to recently completing an interim review of data collected for the first four cohorts in the Company's ongoing European Phase I/II clinical study of L-DOS47 in Poland. On October 15, 2013, the Company announced the completion of an interim review of data collected to date in this study. The data to date have shown that L-DOS47 was well-tolerated for all patients within all cohorts. Duration of treatment has increased with each dose escalation, including one patient that was dosed for approximately 18 weeks without disease progression. We remain on plan for the completion of the Phase I component of the trial by the summer of 2014 and a formal analysis of the data will be conducted following collection of all data at the completion of the study.
- Completed the sale of its Rivex Pharma division on January 25, 2013;
- Implemented changes to the board of directors resulted in the appointments of Sławomir Ludwikowski, Professor Sławomir Majewski and Mr. Stacy L. Wills;
- Announced its intention to change the Company's auditors from KPMG LLP to BDO Canada LLP, effective following the completion of the Company's fiscal 2013 audit by KPMG LLP, with a transition period that commenced on June 21, 2013;
- Established Helix Polska sp.z o.o., further strengthening Canadian-Polish relationships and scientific collaboration which began in 2005, when Polish investors first became shareholders of the Company;
- Terminated the material transfer and license agreement with Merck & Co. Inc. for the Company's Topical Interferon Alpha-2b drug development program and in addition closed the Saskatoon laboratory. The Company has now limited ongoing activities relating to its Tropical Interferon Alpha-2b to sourcing and qualifying alternative interferon alpha-2b raw material samples, and finding suitable strategic partner(s) who would be willing to license or acquire the product and support the remaining development costs through to commercial launch.
FINANCIAL REVIEW
The Company recorded a net loss and total comprehensive loss of $1,545,000 ($0.02 loss per common share) and $17,423,000 ($0.26 loss per common share) for the fiscal years ended 2013 and 2012, respectively.
The net loss and comprehensive loss of $1,545,000 for the fiscal year ended 2013 includes a gain on sale from discontinued operations totaling $6,019,000 (2012 - $nil) and net income from discontinued operations totaling $630,000 (2012 - $1,431,000). On January 25, 2013, the Company announced the sale of its distribution business in Canada. In fiscal 2012 the Company realized a one-time charge of $6,536,000 (2013 - $nil) related to Special Committee and Settlement expenditures in connection with the 2012 AGM.
Excluding the gain on sale and the net income and total comprehensive income from discontinued operations, the Company realized a net loss and total comprehensive loss from continuing operations of $8,194,000 ($0.12 loss per common share) and $18,854,000 ($0.28 loss per common share) for the fiscal years ended 2013 and 2012, respectively.
Research and development
Research and development costs for fiscal 2013 and 2012 totalled $5,032,000 and $7,450,000, respectively, with the bulk of the research and development costs represented by L-DOS47, Topical Interferon Alpha-2b and Corporate research and development initiatives.
L-DOS47 research and development expenses for fiscal 2013 and 2012 totalled $2,771,000 and $3,581,000, respectively. L-DOS47 research and development expenditures mainly reflect expenditures associated with the ongoing European Phase I/II clinical study in Poland.
Topical Interferon Alpha-2b research and development expenses for fiscal 2013 and 2012 totalled $774,000 and $1,631,000, respectively. Beginning in June 2012, the Company initiated a downsizing of the staff in the Saskatoon laboratory which ultimately resulted in the close of the facility in November 2012. The Company has now limited ongoing activities relating to its Tropical Interferon Alpha-2b to sourcing and qualifying alternative interferon alpha-2b raw material samples, strengthening the BiPhasix™ patent portfolio and finding suitable strategic partner(s) who would be willing to license or acquire the product and support the remaining development costs through to commercial launch.
The Company also incurs corporate research and development expenses. Corporate research and development expenses totalled $1,081,000 and $1,407,000 respectively for the fiscal periods ended July 31, 2013 and 2012. The lower expenses can be attributed to a reduction in payroll expense associated with headcount reductions of corporate research and development employees in fiscal 2012 in addition to a reduction in travel, consulting and insurance related expenses.
Operating, general and administration
Operating, general and administration expenses for the fiscal years ended 2013 and 2012 totalled $3,196,000 and $4,580,000, respectively and represents a decrease of $1,384,000 (30.2%) when compared to fiscal 2012. Lower operating, general and administration expenses are the result of cost cutting measures by the Company, which include reductions related to lower legal and audit fees as a result of the Company having voluntarily surrendered its listing on the NYSE-MKT exchange in the United States, lower stock-based compensation expenses, reduced headcount and investor relations outsourcing activities.
Special committee and settlement agreement
All expenses relating to the Company's contested annual general meeting of shareholders in January 2012 and the related activities of the special committee and settlement agreement were incurred during fiscal 2012.
LIQUIDITY AND CAPITAL RESOURCES
The Company's cash reserves of $4,493,000 as at July 31, 2013 are insufficient to meet anticipated cash needs for working capital and capital expenditures through the next twelve months, nor are they sufficient to see the current research and development initiates through to completion. To the extent that the Company does not believe it has sufficient liquidity to meet its current obligations, management considers securing additional funds, primarily through the issuance of equity securities of the Company, to be of the utmost importance.
The Company's consolidated fiscal 2013 and 2012 financial statements are summarized below.
| Consolidated Statements of Net Loss and Comprehensive Loss | |||||||||
| (thousand $, except for per share data) | |||||||||
| 2013 | 2012 | ||||||||
| Expenses: | |||||||||
| Research and development | 5,032 | 7,450 | |||||||
| Operating, general & administration | 3,196 | 4,580 | |||||||
| Special committee & settlement agreement | - | 6,536 | |||||||
| Loss (gain) on disposal and impairment on property, plant and equipment | (18 | ) | 320 | ||||||
| Results from operating activities | |||||||||
| before finance items | (8,210 | ) | (18,886 | ) | |||||
| Finance items | 16 | 32 | |||||||
| Loss and total comprehensive lossfrom continuing operations | (8,194 |
) | (18,854 |
) | |||||
| Net income and total comprehensive income from discontinued operations | 630 | 1,431 | |||||||
| Gain fro msale of discontinued operations | 6,019 | - | |||||||
| Net loss and total comprehensive loss | (1,545 | ) | (17,423 | ) | |||||
| Loss per share from continuing operations * | $ | (0.12 | ) | $ | (0.28 | ) | |||
| Income per share from discontinued operations * | $ | 0.01 | $ | 0.02 | |||||
| Gain per share from sale of discontinued operations * | $ | 0.09 | $ | - | |||||
| Total loss per common share * | $ | (0.02 | ) | $ | (0.26 | ) | |||
| * Figures are for both basic and fully diluted | |||||||||
| Consolidated Statements of Cash Flows (thousand $) | |||||||
| 2013 | 2012 | ||||||
| Cash provided by (used in): | |||||||
| Net loss and total comprehensive loss | (8,194 | ) | (18,854 | ) | |||
| Items not involving cash: | |||||||
| Depreciation of property, plant and equipment | 396 | 699 | |||||
| Deferred lease credit | (25 | ) | (25 | ) | |||
| Stock-based compensation | 241 | 1,347 | |||||
| Stock-based consideration | - | 69 | |||||
| Foreign exchange loss | 9 | 76 | |||||
| Loss on disposal and impairment on property, plant and equipment | (18 | ) | 320 | ||||
| (7,591 | ) | (16,368 | ) | ||||
| Changes in non-cash working capital | (223 | ) | 828 | ||||
| Operating activities | (7,814 | ) | (15,540 | ) | |||
| Financing activities | - | 43 | |||||
| Investing activities | (6 | ) | (37 | ) | |||
| Effect of exchange rate changes on cash | (9 | ) | (76 | ) | |||
| Net decrease in cash from continuing operations | (7,829 | ) | (15,610 | ) | |||
| Net increase in cash from discontinued operations | 7,460 | 1,428 | |||||
| Cash beginning of the year | 4,862 | 19,044 | |||||
| Cash end of the year | 4,493 | 4,862 | |||||
| Consolidated Statement of Financial Position (thousand $) | |||||
| 2013 | 2012 | ||||
| Non current assets | 677 | 1,493 | |||
| Current assets: | |||||
| Prepaids | 139 | 107 | |||
| Inventory | - | 421 | |||
| Accounts receivable | 559 | 733 | |||
| Cash | 4,493 | 4,862 | |||
| 5,191 | 6,123 | ||||
| Total assets | 5,868 | 7,616 | |||
| Shareholders' equity | 4,920 | 6,224 | |||
| Non current liabilities | - | 23 | |||
| Current liabilities: | |||||
| Deferred lease credit | 23 | 25 | |||
| Accrued liabilities | 621 | 694 | |||
| Accounts payable | 304 | 650 | |||
| 948 | 1,369 | ||||
| Total liabilities & shareholders equity | 5,868 | 7,616 | |||
The Company's complete 2013 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 www.sedar.com, as well as on the Company's website at www.helixbiopharma.com. Shareholders have the ability to receive a hard copy of the Company's complete audited financial statements free of charge upon request.
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 its Topical Interferon Alpha-2b. Helix is currently listed on the TSX and FSE under the symbol "HBP".
Forward-Looking Statements and Risks and Uncertainties
This news release contains forward-looking statements and information (collectively, "forward-looking statements") within the meaning of applicable Canadian securities laws. Forward-looking statements are statements and information that are not historical facts but instead include financial projections and estimates; statements regarding plans, goals, objectives, intentions and expectations with respect to the Company's future business, operations, research and development, including the focus of the Company on its two drug candidates, L-DOS47 and Topical Interferon Alpha-2b (cervical lesions indication) and other information in future periods.
Forward-looking statements include, without limitation, statements concerning (i) the Company's ability to operate on a going concern being dependent mainly on obtaining additional financing; (ii) the Company's growth and future prospects being dependent on the success of one or both of L-DOS47 and Topical Interferon Alpha-2b; (iii) the Company's priority continuing to be L-DOS47; (iv) the Company's development programs for Topical Interferon Alpha-2b, DOS47 and L-DOS47, including but not limited to, extension of the drug candidates to other indications and the identification and development of further tumour-targeting antibodies for DOS47; (v) the Company's Polish Phase I/II clinical trials for L-DOS47; (vi) future expenditures, insufficiency of the Company's current cash resources and the need for financing and cost-cutting and/or cost-deferral measures; (vii) future financing requirements, the seeking of additional funding and anticipated future operating losses; and (viii) the acceptance of the private placement by the Toronto Stock Exchange, the closing of the private placement and the expected amount of the gross proceeds and the net proceeds to be received in connection with the private placement. Forward-looking statements can further be identified by the use of forward-looking terminology such as "2013", "2014", ongoing" 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.
Forward-looking statements are statements about the future and are inherently uncertain, and are necessarily based upon a number of estimates and assumptions that are also uncertain. Although the Company believes that the expectations reflected in such forward-looking statements are reasonable, such statements involve risks and uncertainties, and undue reliance should not be placed on such statements. Forward-looking statements, including financial outlooks, are intended to provide information about management's current plans and expectations regarding future operations, including without limitation, future financing requirements, and may not be appropriate for other purposes. Certain material factors, estimates or assumptions have been applied in making forward-looking statements in this news release, including, but not limited to, the safety and efficacy of L-DOS47 and Topical Interferon Alpha-2b (low-grade cervical lesions); that sufficient financing will be obtained in a timely manner to allow the Company to continue operations; the timely provision of services and supplies, including Interferon alpha-2b raw materials, or other performance of contracts by third parties; future costs; the absence of any material changes in business strategy or plans; the timely receipt of required regulatory approvals and strategic partner support; and the acceptance of the private placement by the Toronto Stock Exchange, the closing of the private placement and the expected amount of the net proceeds to be received in connection with the private placement.
The Company's actual results could differ materially from those anticipated in the forward-looking statements contained in this news release as a result of numerous known and unknown risks and uncertainties, including without limitation, the risk that the Company's assumptions may prove to be incorrect; the risk that additional financing may not be obtainable in a timely manner, or at all (including that the Toronto Stock Exchange may not accept the private placement and/or that the private placement may not close or that the actual amount of the net proceeds may be lower than anticipated), and that clinical trials may not commence or complete within anticipated timelines or may fail; third party suppliers of necessary services or of drug product and other materials may fail to perform or be unwilling or unable to supply the Company, which could cause delay or cancellation of the Company's research and development or distribution activities; necessary regulatory approvals may not be granted or may be withdrawn; the Company may not be able to secure necessary strategic partner support; general economic conditions, intellectual property and insurance risks; changes in business strategy or plans; and other risks and uncertainties referred to elsewhere in this news release, any of which could cause actual results to vary materially from current results or the Company's anticipated future results. Certain of these risks and uncertainties, and others affecting the Company, are more fully described in Helix's Annual Report, in particular under the headings "Forward-looking Statements" and "Risk Factors", and other reports filed under Helix's profile on SEDAR at www.sedar.com from time to time at. Forward-looking statements and information are based on the beliefs, assumptions, opinions and expectations of Helix's management on the date of this new release, and Helix does not assume any obligation to update any forward-looking statement or information should those beliefs, assumptions, opinions or expectations, or other circumstances change, except as required by law.
Contact Information:
Investor Relations:
Helix BioPharma Corp.
Tel: 905 841-2300
Email: ir@helixbiopharma.com