DGAP-News: Helix BioPharma Corp. Announces Q1 2012 Results

Helix BioPharma Corp. / Key word(s): Interim Report

13.01.2012 23:39
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AURORA, ON — (Marketwire) — 01/13/12 — Helix BioPharma Corp.
(TSX: HBP) (NYSE Amex: HBP) (FRANKFURT: HBP), a biopharmaceutical
company developing drug candidates for the prevention and treatment
of cancer, today announced financial results for the quarter ended
October 31, 2011.

HIGHLIGHTS

DOS47/L-DOS47:

— As previously announced, during the fiscal year ended July 31, 2011,
Helix received regulatory approvals to conduct two clinical studies
with its lung cancer drug candidate L-DOS47, a European Phase I/II
study and U.S. Phase I study. Both studies have been designed to
examine safety, tolerability and preliminary efficacy of L-DOS47.
Pre-study logistical preparations are ongoing for both studies, with
patient recruitment expected to commence early in calendar 2012.

Topical Interferon Alpha-2b:

— Subsequent to the quarter-end, the –clinical hold– on the Company–s
investigational new drug (–IND–) application for its Topical
Interferon Alpha-2b, Phase II/III, low-grade cervical lesion efficacy
trial has been removed by the United States Food and Drug
Administration (–FDA–), following submission of Helix–s complete
clinical hold response during the quarter. Accordingly, as reported in
its news release of November 11, 2011, Helix now has FDA approval to
perform the planned clinical trial. As previously reported, the
Company is still in need of additional funding as well as strategic
partner support before commencing this trial.

— On December 22, 2011, the Company announced the filing of a clinical
trial application for its planned European Phase III efficacy trial of
topical interferon alpha-2b in patients with low-grade cervical
lesions.

Annual General Meeting / Special Committee:

— Helix–s annual general meeting (–AGM–) has been scheduled for January
30, 2012. Subsequent to the end of the quarter, as announced on
November 16, 2011, Helix–s Board of Directors appointed a special
committee of independent directors, Jack Kay and Tom Hodgson (the
–Special Committee–), to advise the Board with respect to the AGM, and
to deal with matters raised by certain shareholders who participated
in private placements by the Company in Europe. As announced on
December 6, 2011, the Special Committee engaged Ernst&Young LLP
to assist the Special Committee in the investigation of the conduct of
certain shareholders and parties related to these shareholders that
had come to the attention of the Special Committee, in relation to
representations and assurances that were not authorized by the Company
which may have been made with respect to the return on investment of
the Company–s shares to certain European shareholders who bought
shares under private placements undertaken in Europe. In addition,
counsel to the Special Committee has commenced an application to the
Ontario Superior Court of Justice (Commercial List) seeking directions
from the Court in relation to the AGM.

— On January 6, 2012, the Company announced a corporate growth strategy
and its proposed new board of director slate for the January 30, 2012
annual general meeting comprising Dr. Donald H. Segal, Mr. Jack Kay,
Mr. W. Thomas Hodgson, Ms. Ewa Don-Siemion, Prof. Wojciech Kwiatek and
Dr. Wayne Schnarr.

Other:

— On January 9, 2012, the Company announced the appointment of Mr. Jack
Kay as Chairman of the Board and Prof. Kazimierz Roszkowski-Sliz as
European Medical Director.

RESULTS FROM OPERATIONS
Three month period ended October 31, 2011
compared to the same period in the previous year

Beginning with the three-month period ended October 31, 2011, Helix
is reporting its financial results in accordance with International
Financial Reporting Standards (IFRS), as required for public
companies in Canada. Previously, Helix reported its financial results
under Canadian Generally Accepted Accounting Standards (GAAP).
Financial results for the corresponding period in fiscal 2011 have
been restated to reflect the adoption of IFRS.

Loss for the period
During the first quarter of fiscal 2012, the
Company recorded a loss of $3,244,000 or $0.05 per common share,
resulting in a decreased loss of $357,000 when compared to the first
quarter of fiscal 2011. The Company recorded a loss of $3,601,000 or
$0.06 per common share in the first quarter of fiscal
2011.

Revenues
Revenues in the first quarter of fiscal 2012 totaled
$1,122,000 (2011 – $1,205,000) resulting in a decrease of $83,000 or
6.9% when compared to the first quarter of fiscal 2011.

Product revenues totaled $1,122,000 in the first quarter of fiscal
2012. When compared to the first quarter of fiscal 2011, product
revenues increased by $17,000 or 1.5%. Product revenues were higher
for Orthovisc(R) and Monovisc(TM) while product revenues were lower
for Klean-Prep(R), Normacol(R) and Imunovir(R). Changes in product
revenues are a result of sales volumes, rather than pricing.

License fees and royalties totaled $Nil in the first quarter of
fiscal 2012. When compared to the first quarter of fiscal 2011,
license fees and royalties were lower by $100,000. On December 1,
2010, the Company entered into an agreement to assign certain
international Klean-Prep(R) rights to Helsinn. As a result, Helix
will no longer earn royalty revenue associated with Klean-Prep(R),
going forward. The Company currently does not have any other
arrangements in place generating license fees or royalties.

Cost of sales
Cost of sales totaled $456,000 in the first quarter of
fiscal 2012 (2011 – $414,000). As a percentage of product revenues,
cost of sales in the first quarter of fiscal 2012 and the first
quarter of 2011 were 40.6% and 37.5%, respectively. The higher cost
of sales in the first quarter of fiscal 2012 was primarily due to
higher inventory purchasing costs associated with a weakening
Canadian dollar and higher price discount on a large volume customer
order.

Research&development
Research and development costs in the first
quarter of fiscal 2012 totaled $2,111,000 (2011 – $2,846,000) for a
decrease of $735,000.

Topical Interferon Alpha-2b research and development costs in the
first quarter of fiscal 2012 totaled $902,000 (2011 – $1,285,000) for
a decrease of $383,000. Lower research and development expenditures
are associated with both of the Company–s Topical Interferon Alpha-2b
previous clinical programs having been completed. The Company has
concentrated its efforts on resolving the FDA clinical hold
associated with its application to conduct a U.S. Phase II/III IND
trial for low-grade cervical lesions. Subsequent to October 31, 2011,
the clinical hold on the Company–s IND application for its Topical
Interferon Alpha-2b, Phase II/III, low-grade cervical lesion efficacy
trial has been removed by the FDA.

L-DOS47 research and development costs in the first quarter of fiscal
2012 totaled $1,209,000 (2011 – $1,561,000) for a decrease of
$352,000. The L-DOS47 research and development expenditures in fiscal
2012 reflect expenditures associated with the preparation for
commencement of the Phase I Clinical Study in the U.S. and a Polish
Phase I/II Clinical Study.

Operating, general&administration
Operating, general and
administration expenses in the first quarter of fiscal 2012 totaled
$1,520,000 (2011 – $1,330,000) for an increase of $190,000. The
increase in operating, general and administration expenditures is the
result of higher legal and audit fees in the first quarter of fiscal
2012. The higher legal fees are associated with dealing with matters
leading up to the Company–s AGM scheduled for January 30, 2012.
Operating, general and administration expenses for the second quarter
of fiscal 2012 are expected to increase due to legal fees and other
administrative expenses related to the AGM and Special Committee.

Sales and marketing
Sales and marketing expense in the first quarter
of fiscal 2012 totaled $298,000 (2011 – $298,000).

Interest income
Interest income in the first quarter of fiscal 2012
totaled $44,000 (2011 – $50,000).

Foreign exchange gain/loss
Foreign exchange losses in the first
quarter of fiscal 2012 totaled $25,000 (2011 – gain of $35,000).
Foreign exchange gains and losses are mainly the result of the
foreign currency translation of the Company–s foreign operation in
Ireland. The net assets in Ireland consist mainly of cash and cash
equivalents, denominated in Euros.

Income taxes
Income tax expense in the first quarter of fiscal 2012
totaled $Nil (2011 – $3,000). Income taxes are attributable to the
Company–s operations in Ireland.

CASH FLOW

Operating activities
Cash used in operating activities totaled
$1,391,000 in the first quarter of fiscal 2012 (2011 – $3,083,000),
which includes a net loss of $3,244,000 (2011 – net loss of
$3,601,000) in the respective fiscal quarters.

Significant adjustments in the first quarter of fiscal 2012 include
stock-based compensation of $386,000 (2011 – $732,000), amortization
of property, plant and equipment of $174,000 (2011 – $107,000),
deferred lease credits of $7,000 (2011 – $6,000), foreign exchange
losses of $25,000 (2011 – $35,000 gain) and changes in non-cash
working capital balances related to operations of $1,236,000 (2011 –
negative $280,000).

Financing activities
Financing activities in the first quarter of
fiscal 2012 were $43,000 (2011 – $9,457,000). Financing activities in
the first quarter of fiscal 2012 reflect the exercise of stock
options while 2011 reflect the net proceeds from a private placement.

Investing activities
Use of cash in investing activities in the
first quarter of fiscal 2012 totaled $17,000 (2011 – $9,000).

LIQUIDITY AND CAPITAL RESOURCES

Since inception, the Company has financed its operations from public
and private sales of equity, proceeds received upon the exercise of
warrants and stock options, and, to a lesser extent, from 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, as well as economic conditions relating to the state of the
capital markets generally.

At October 31, 2011, the Company had cash and cash equivalents
totaling $17,654,000 (July 31, 2011 – $19,044,000). The total number
of common shares issued as at October 31, 2011 was 67,208,105 (July
31, 2011 – 67,164,934).

Though the Company does not currently have enough cash reserves to
fully fund its planned L-DOS47 clinical studies which the Company has
estimated are to last over approximately a three year period, nor to
initiate its Topical Interferon Alpha-2b clinical studies (assuming
regulatory approvals and strategic partner support are obtained), the
Company does have sufficient cash reserves to meet anticipated cash
needs for working capital and capital expenditures beyond the next
twelve months, provided there are no materially negative
unanticipated changes to planned expenditures and revenues. The
Company–s planned expenditures in the next twelve months do not
include severance payouts of up to $2,600,000 that could result froma change in the Board of Directors of the Company if such change
triggers change of control clauses in certain employment agreements.
The Company may face a contested election for its Board of Directors
at the AGM which could result in such a change of control. The
Company will continue to seek additional funding to carry out its
business plan and to minimize, to the best of its ability, the risks
to its operations.

Equity financing has historically been Helix–s primary source of
funding, however, the market for equity financings for companies such
as Helix is challenging, and the ongoing global economic downturn and
credit crisis continue to add further challenges. The AGM / Special
Committee matters referred to above under –Highlights – Annual
General Meeting / Special Committee– are also likely to have a
negative effect on equity financing in the near term. While the
Company has been able to raise equity financing in recent years,
there can be no assurance that additional funding by way of equity
financing will continue to be available. Any additional equity
financing, if secured, would result in dilution to the existing
shareholders which may be significant. 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 failure of
the Company to obtain additional financing on a timely basis may
result in the Company reducing, delaying or cancelling one or more of
its planned research, development and marketing programs, including
any ongoing clinical trials, and reducing related overhead, any of
which could impair the current and future value of the business. The
Company is not certain when or whether it will achieve profitability,
or whether it will be able to increase its revenues or raise
additional investment capital, or whether a change in control of the
Board of Directors will trigger the payout of severance amounts
totaling approximately $2,600,000, all of which may cast significant
doubt as to the ability of the Company to operate as a going concern.

The Company–s unaudited condensed interim consolidated statement of
financial position as at October 31, 2011 and October 31, 2010,
unaudited condensed interim consolidated statement of net loss and
comprehensive loss for the three month periods ending October 31,
2011 and October 31, 2010 and the unaudited condensed interim
consolidated statement of cash flows for the three month periods
ending October 31, 2011 and October 31, 2010 are summarized below:

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Consolidated Statement of Net Loss and Comprehensive Loss
For the three month periods ended October 31
(thousand $, except for per share data)

2011 2010
————– ————-
Revenue:
Product revenue 1,122 1,105
Royalties and license fees – 100
————– ————-
1,122 1,205

Expenses:
Cost of sales 456 414
Research and development 2,111 2,846
Operating, general andadmin 1,520 1,330
Sales and marketing 298 298
Foreign exchange loss
(gain) 25 (35)
————– ————-
4,410 4,853

Loss before undernoted items (3,288) (3,648)
Finance income 44 50
Income tax expense – (3)
————– ————-
Net loss and total comprehensive loss (3,244) (3,601)

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Loss per share:
Basic (0.05) (0.06)
Diluted (0.05) (0.06)
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Consolidated Statements of Cash Flows (thousand $)
For the three month periods ended October 31
2011 2010
——— ———
Cash provided by (used in):

Loss for the quarter (3,244) (3,601)

Items not involving cash:
Amortization of property, plant and equipment 174 107
Deferred lease credit (7) (6)
Stock-based compensation 386 732
Stock-based consideration 39 –
Foreign exchange loss (gain) 25 (35)
——— ———
(2,627) (2,803)

Change in non-cash working capital 1,236 (280)
——— ———

Operating activities (1,391) (3,083)

Financing activities 43 9,457

Investing activities (17) (9)

Effect of exchange rate changes on cash and cash
equivalents (25) 35
——— ———

Cash and cash equivalents:
Increase/(decrease) (1,390) 6,400
Beginning of the period 19,044 13,125
——— ———
End of the period 17,654 19,525
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Consolidated Statement of Financial
Position (thousand $) as at:
Oct-31 Jul-31 Aug-01
2011 2011 2010
———- ———- ———-

Current assets:
Cash and cash equivalents 17,654 19,044 13,125
Accounts receivable 955 1,906 1,365
Inventory 425 528 780
Prepaid and other 141 202 398
———- ———- ———-
19,175 21,680 15,668
Non current assets 2,534 2,691 2,446
———- ———- ———-
Total assets 21,709 24,371 18,114
========== ========== ==========

Current liabilities:
Accounts payable 1,299 1,085 1,392
Accrued liabilities 709 804 821
Income tax payable 298 296 43
Deferred lease credit 25 25 25
———- ———- ———-
2,331 2,210 2,281
Non current liabilities 41 48 72
———- ———- ———-
Total liabilities 2,372 2,258 2,353
Shareholders– equity 19,337 22,113 15,761
———- ———- ———-
Total liabilities and shareholders–equity 21,709 24,371 18,114
========== ========== ==========

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The Company–s unaudited condensed interim consolidated financial
statements and management–s discussion and analysis are being filed
today with Canadian securities regulatory authorities and with the US
Securities and Exchange Commission and will be available at
www.sedar.com and at www.sec.gov, respectively, 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 unaudited condensed
interim consolidated 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 listed on the TSX, NYSE Amex and FSE under the symbol –HBP.–

Forward-Looking Statements and Risks and Uncertainties
This News
Release contains certain forward-looking statements and information
(collectively, –forward-looking statements–) within the meaning of
applicable securities laws, regarding the development of products by
Helix for the prevention and treatment of cancer based on its
proprietary technologies; sufficiency of the Company–s cash reserves
and expected cash flow from operations; need for additional
financing; the Company–s plans to initiate clinical studies for
L-DOS47; the Company–s upcoming AGM; Special Committee matters and
its investigation and court application, and other information in
future periods. 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. Although Helix 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. Certain
material factors or assumptions are applied in making forward-looking
statements, including, but not limited to, receipt of necessary
additional funding, strategic partner support and regulatory
approvals; GMP manufacturing and other activities; the timely
provision of services and performance of contracts by third parties;
and future revenue, costs and expenditures. Helix–s actual results
could differ materially from those anticipated in these
forward-looking statements as a result of numerous risks and
uncertainties including without limitation, Helix–s need for
additional capital, which may not be available; uncertainty whether
the Company–s products under development, including L-DOS47 and
Topical Interferon Alpha-2b, will be successfully developed and
commercialized; the risk that the Company–s expected timelines for
meeting certain objectives may not be met; uncertainty whether
clinical trials will proceed as planned or at all, and the risk that
clinical trial results may be negative; insurance and intellectual
property risks; research and development risks; the need for further
regulatory approvals, which may not be obtained; the Company–s
dependence on its third-party service providers; upscaling and
manufacturing risks; partnership / strategic alliance risks; the
effect of competition; the risk of technical obsolescence;
uncertainty of the size and existence of a market opportunity for
Helix–s products; uncertainty whether the Company will be able to
obtain an appropriate pharmaceutical or strategic partner for the
drug candidates, which are not assured; changes in the board of
directors, business strategy or plans; uncertainty of the outcome of
the AGM or the Special Committee matters, investigation or court
application; the risk that the Company may be required to pay out
severance amounts as a result of a change of control of the Board of
Directors of up to $2.6 million; and the risk factors that are
discussed under Item 3.D. – –Risk Factors– in the Company–s latest
Form 20-F Annual Report or identified in the Company–s other public
filings with the Canadian securities administrators at www.sedar.com
or with the SEC at www.sec.gov. Forward-looking statements and
information are based on the beliefs, assumptions 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, assumptions or expectations, or
other circumstances change, except as required by law.

News Source: Marketwire

13.01.2012 Dissemination of a Corporate News, transmitted by DGAP –
a company of EquityStory AG.
The issuer is solely responsible for the content of this announcement.

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Language: English
Company: Helix BioPharma Corp.

Canada
Phone:
Fax:
E-mail:
Internet:
ISIN: CA4229101098
WKN:

End of Announcement DGAP News-Service

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