AURORA, ON, Dec. 15 /CNW/ - Helix BioPharma Corp. (TSX, FSE: "HBP") today
announced financial results for the first quarter of fiscal 2006, ended
October 31, 2005.
HIGHLIGHTS IN THE QUARTER
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- Received approval in Sweden to conduct a Phase II clinical trial of
Topical Interferon Alpha-2b for an additional disease indication,
patients with ano-genital warts who are positive for infection with
the human papilloma virus (HPV);
- DOS47 scientific paper published in Journal of Experimental
Therapeutics and Oncology;
- Completed private placement financings during the quarter and
subsequently, for gross proceeds of $9,500,000
RESULTS FROM OPERATIONS
Three month period ended October 31, 2005 compared to the same period in
the previous year
During the first quarter of fiscal 2006, the Company recorded a loss of
$1,451,000 or $0.05 per common share, for an increase of $98,000 when compared
to the first quarter of fiscal 2005, when the Company recorded a loss
$1,353,000.
Revenues for the first quarter of fiscal 2006 totalled $906,000, for a
decrease of $72,000 or 7.4% when compared to total revenues for the first
quarter of fiscal 2005 of $978,000. Higher research and development contract
revenue, along with higher Orthovisc(R) revenues, partially offset the lower
royalties from Helsinn-Birex. The royalty rate from Helsinn-Birex was, as
previously scheduled, reduced in half effective January 1, 2005, resulting in
lower royalties in the quarter, as expected.
Cost of sales totalled $313,000 in the first quarter of fiscal 2006 and
was relatively flat, when compared to the first quarter of 2005, when cost of
sales totalled $315,000.
Research and development costs in the first quarter of fiscal 2006
totalled $640,000 for a decrease of $90,000, when compared to the first
quarter of fiscal 2005, when research and development costs totalled $730,000.
The Company expects to increase research and development spending in fiscal
2006, as its Topical Interferon Alpha-2b and L-DOS47 product candidates
continue to be developed.
Operating, general and administration expenses in the first quarter of
fiscal 2006 totalled $866,000, for an increase of $72,000 when compared to the
first quarter of 2005, when operating, general and administration expenses
totalled $794,000. This increase is the result of higher marketing
expenditures in support of sales growth, the implementation of directors' fees
and wage increases. The Company expects marginal increases in its operating,
general and administrative costs in fiscal 2006, as work increases on project
development.
Amortization of intangible assets in the first quarter of fiscal 2006
totalled $301,000, for a decrease of $10,000 when compared to the first
quarter of 2005. Amortization of capital assets in the first quarter of fiscal
2006 totalled $81,000 and remains unchanged when compared to the first quarter
of 2005.
Stock-based compensation expense in the first quarter of fiscal 2006
totalled $43,000 versus nil in the first quarter of fiscal 2005. The Company
granted options totalling 20,000, with a fair value of $29,000 and expensed an
additional $14,000 relating to the amortization of options over their vesting
period. During the quarter, 20,000 stock options expired unexercised.
Interest income in the first quarter of fiscal 2006 totalled $29,000 for
a decrease of $11,000 when compared to the first quarter of fiscal 2005.
Foreign exchange losses in the first quarter of fiscal 2006 totalled
$112,000 for an increase of $42,000 when compared to the foreign exchange
losses of $70,000 in the first quarter of fiscal 2005. Foreign exchange gains
were realized from Euro and US dollar denominated purchases of product sold in
Canada. These exchange gains were more than offset by the foreign currency
translation of the Company's integrated foreign operation in Europe. The net
assets of the Company's integrated foreign operation in Europe consists mainly
of cash and cash equivalents, denominated in Euro currency and are used to
fund its Topical Interferon Alpha-2b clinical program in Europe.
Income tax expense in the first quarter of fiscal 2006 totalled $30,000
and is a decrease of $40,000 when compared to the income tax expense in the
first quarter of fiscal 2006. All income taxes are attributable to the
Company's operations in Europe.
CASH FLOW
Net loss from operations totalled $1,451,000 in the first quarter of
fiscal 2006 for an increase of $98,000 when compared to the net loss from
operations for the first quarter of fiscal 2005 of $1,353,000. Adjusting for
non-cash and working capital items, the cash used in the first quarter of
fiscal 2006 totalled $707,000 and is a decrease of $385,000 when compared to
the cash used in the first quarter of fiscal 2005, which totalled $1,092,000.
Financing activities provided additional cash of $3,696,000 in the first
quarter of fiscal 2006 for a decrease of $1,532,000 when compared to cash
provided from financing activities in the first quarter of fiscal 2005, which
totalled $5,228,000. In both the first quarters of fiscal 2006 and 2005, the
Company completed private placements with net proceeds of $3,700,000 and
$5,238,000 respectively. The Company also made long-term debt repayments in
both first quarters of fiscal 2006 and 2005 of $4,000 and $10,000,
respectively.
The Company redeemed $990,000 of short-term investments in the first
quarter of fiscal 2006 compared to $2,986,000 in the first quarter of fiscal
2005, for a decrease of $1,996,000.
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.
On October 4, 2005, the Company raised net proceeds of $3,700,000 (after
finder's fees) through a private placement of 2,339,181 units at $1.71 per
unit. Each unit consists of one common share and one share purchase warrant.
Each share purchase warrant can be exercised on or before March 31, 2008 for
one common share, at a price of $2.39.
As at October 31, 2005, the Company had cash and cash equivalents along
with short-term investments totalling $9,465,000, compared with 6,600,000 at
July 31, 2005. The total number of common shares issued and outstanding at
October 31, 2005 was 29,522,906 (October 31, 2004 - 27,183,725).
On November 7, 2005, following the Company's first quarter, the Company
further strengthened its cash and cash equivalents position by raising net
proceeds of $5,132,000 (after finder's fees) through a private placement of
3,156,428 units at $1.75 per unit. Each unit consists of one common share and
one share purchase warrant. Each share purchase warrant can be exercised on or
before March 31, 2008 for one common share, at a price of $2.45.
After taking into consideration the improved working capital resulting
from the successful completion of the private placements, the decrease in
royalty rate from the Helsinn-Birex license, planned expenditures for research
and development for the Phase II clinical program of the Company's Topical
Interferon Alpha-2b, research expenditures relating to the Company's novel
anti-cancer therapeutic, L-DOS47, and marketing expenditures relating
primarily to Orthovisc(R), the Company expects that its working capital will
be sufficient to finance operations through to December 2007. 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 first quarter fiscal 2006
and 2005 financial statements are summarized below:
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Consolidated Statements of Operations
for the three month period ended October 31
(thousand $, except for per share data)
2005 2004
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Revenue:
Product revenue 736 664
License fees and royalties 145 314
Research and development contracts 25 -
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906 978
Expenses:
Cost of sales 313 315
Research and development 640 730
Operating, general and admin 866 794
Amortization of intangibles 301 311
Amortization of capital assets 81 81
Stock-based compensation 43 -
Interest income, net (29) (40)
Foreign exchange loss 112 70
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2,327 2,261
Loss before income taxes (1,421) (1,283)
Income taxes 30 70
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Loss for the period (1,451) (1,353)
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Loss per share:
Basic (0.05) (0.05)
Diluted (0.05) (0.05)
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Consolidated Statements of Cash Flows
for the three month period ended October 31
(thousand $)
2005 2004
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Cash provided by (used in):
Loss for the period (1,451) (1,353)
Items not involving cash:
Amortization of capital assets 81 81
Amortization of intangibles 301 311
Stock-based compensation 43 -
Foreign exchange loss 120 70
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(906) (891)
Change in non-cash working capital 199 (201)
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Operating activities (707) (1,092)
Financing activities 3,696 5,228
Investing activities 986 2,825
Effect of exchange rate changes on
cash and cash equivalents (120) (72)
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Increase in cash and cash equivalents 3,855 6,889
Cash and cash equivalents:
Beginning of the period 4,130 3,597
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End of the period 7,985 10,486
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Consolidated Balance Sheets as at
($ thousands)
31-Oct 31-Jul
2005 2005
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Current assets:
Cash and cash equivalents 7,985 4,130
Short-term investments 1,480 2,470
Accounts receivable 657 461
Inventory 337 474
Prepaid and other 193 283
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10,652 7,818
Non current assets 3,254 3,632
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13,906 11,450
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31-Oct 31-Jul
2005 2005
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Current liabilities:
Accounts payable & accruals 1,253 1,060
Deferred revenue 25 50
Long-term debt - current portion 20 20
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1,298 1,130
Long term debt 14 18
Shareholders' equity 12,594 10,302
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13,906 11,450
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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", and quoted on the Frankfurt, Berlin, Munich
and Stuttgart Stock Exchanges under the same symbol.
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. This News Release contains certain forward-looking statements
regarding the Company's activities and finances, which statements can be
identified by the use of forward-looking terminology such as "leading",
"future", "identify", "characterize", "planned", "expects", "developing",
"with a view to", or variations thereon, or that events "can", "should" or
"will" occur, or comparable terminology referring to future events or results.
Forward looking statements are statements about the future and are inherently
uncertain, and Helix's actual results could differ materially from those
anticipated in these forward-looking statements as a result of numerous
factors, including without limitation, uncertainty whether the proposed
Swedish clinical trial will be commenced or completed as proposed or at all;
uncertainty whether the results of either the German study or the Swedish
trial 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; 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 news releases and filings with the Canadian Securities Regulatory
Authorities, any of which could cause actual results to vary materially from
current results or Helix's anticipated future results. Forward-looking
statements 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 should those beliefs, opinions or
expectations, or other circumstances change.
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