(Aurora, Ontario) – Helix BioPharma Corp. (TSX, FSE: “HBP”), a biopharmaceutical company developing drug
candidates for the prevention and treatment of cancer, today announced its financial results and research and
development update for the three and six month periods ended January 31, 2013 and 2012.
HIGHLIGHTS DURING THE FISCAL QUARTER ENDED JANUARY 31, 2013
- On December 14, 2012 the Company announced that it had agreed with Merck to terminate the collaboration
under the material transfer and licence option agreement, originally entered into between the Company and a
Merck subsidiary in December, 2000, for the development of pharmaceutical products containing topical
interferon alpha-2b; - Effective December 14, 2012, Mr. Jack Kay and Mr. Tom Hodgson resigned from the Company’s Board of
Directors; - Effective December 18, 2012, Mr. John A. Rogers was appointed to the Company’s Board of Directors.
- On December 20, 2012 the Company announced that it had opened patient screening for the second dose-level
cohort in its continuing phase I/II clinical safety, tolerability and preliminary efficacy study of L-DOS47 in Poland; - At the Annual General and Special Meeting of shareholders on January 24, 2013 (the “2013 AGM”),
shareholders of the Company approved the sale of the Company’s distribution business, which closed on
January 25, 2013, for gross proceeds of approximately $8.2 million; - Also at the 2013 AGM;
- Shareholders elected of William White, Robert Verhagen, Mario Gobbo, Marek Orlowski, Slawomir
Majewski, John A. Rogers and Slawomir Ludwikowski as directors of the Company; - Shareholders approved a special resolution approving an amendment to Helix’s articles moving Helix’s
registered office to Ontario. - KPMG LLP, Chartered Accountants, were appointed as auditors of the Company. However, a
significant percentage of proxies received prior to the shareholder meeting withheld from voting on the
appointment of an auditor. The board of directors expects to meet with shareholders in the near future
to better understand the reasons for this action, and the board will take appropriate action based on
these discussions with shareholders
- Shareholders elected of William White, Robert Verhagen, Mario Gobbo, Marek Orlowski, Slawomir
- Mr. Mario Gobbo was appointed as Chairman of the board following the 2013 AGM;
- The Company`s had cash and cash equivalents of $8,478,000 as at January 31, 2012.
HIGHLIGHTS SUBSEQUENT TO THE FISCAL QUARTER ENDED JANUARY 31, 2013
- Effective February 8, 2013, Mr. John A. Rogers voluntarily resigned from the Company’s Board of Directors;
- Effective February 21, 2013, Mr. Andrew J. MacDougall was appointed to the Company’s Board of Directors in
order to satisfy the statutory requirement for resident Canadians to comprise at least 25 percent of the Board of
Directors pending completion of the Board’s director nomination process; - On February 21, 2013 the Company announced the application to the Toronto Stock Exchange to extend the
expiry date of warrants issued on September 8, 2009 pursuant to a private placement, by an additional six
months, from March 7, 2013 to September 7, 2013. The Company subsequently announced that its proposal
had been approved by the Toronto Stock Exchange, and that the warrant extension had become effective, on
March 7, 2013. - Effective February 22, 2013, Mr. Bill White voluntarily resigned from the Company’s Board of Directors
RESULTS FROM OPERATIONS
Net income (loss) for the period
The Company recorded net income of $4,699,000 and $2,592,000, respectively for the three and six month periods
ended January 31, 2013 for earning per common share of $0.07 and $0.04, respectively. For the comparative three and
six month periods ended January 31, 2012, the Company recorded a net loss of $9,456,000 and $12,700,000,
respectively for a loss per common share of $0.14 and $0.19.
Included in net income for the three and six month periods ended January 31, 2013 is a gain on sale from discontinued
operations of $6,083,000. On January 25, 2013, the Company announced the sale of its distribution business in Canada.
The sale was for all of the Company’s right, title, and interest in and to the products, assets, property and rights (other than certain excluded assets) used and usable primarily in the business of marketing, distributing and selling certain products and the manufacturing or having manufactured, certain products, as applicable, as carried on through the Rivex Pharma division. Following the sale of the Company’s distribution business, the Company’s ongoing operations will represent its continued focus on research and development of pharmaceutical product candidates. The research and
development of pharmaceutical products requires the expenditure of significant amounts of cash over a relatively long
time period. The Company therefore expects to continue to incur losses from continuing operations, for the foreseeable
future. These research and development activities have no source of revenues, positive operating cash flow or operating earnings.
In addition, the Company incurred special committee and settlement agreement expenditures of $6,159,000 and
$6,405,000 in the three and six month periods ended January 31, 2012, respectively. No such costs were incurred in the
three and six month periods ended January 31, 2013.
The Company recorded net loss from continuing operations of $1,726,000 and $4,126,000, respectively for the three and
six month periods ended January 31, 2013 for a loss per common share of $0.03 and $0.06, respectively. For the
comparative three and six month periods ended January 31, 2012, the Company recorded a net loss from continuing
operations of $4,126,000 and $13,377,000, respectively for a loss per common share on continuing operations of $0.15
and $0.20.
Research & development
Research and development costs totalled $1,049,000 and $2,657,000, respectively for the three and six month periods
ended January 31, 2013. For the three and six month periods ended January 31, 2012, research and development costs
totalled $2,231,000 and $4,342,000, respectively.
L-DOS47 research and development expenses for the three and six month periods ended January 31, 2013 totalled
$639,000 and $1,512,000, respectively ($995,000 and $1,989,000 respectively for the three and six month periods ended
January 31, 2012). L-DOS47 research and development expenditures reflect expenditures associated with the
preparation for commencement of a Polish Phase I/II clinical study and a U.S. Phase I clinical study with L-DOS47.
Given the Company’s limited cash resources, the Company has prioritized the commencement of the European Phase
I/II clinical study with L-DOS47 in Poland while deferring the previously planned commencement of the U.S. Phase I
clinical study with L-DOS47. On May 14, 2012 the Company announced the commencement of clinical site initiations
and patient recruitment activities of its Polish Phase I/II clinical study in Poland. On October 23, 2012, the Company
announced that the first patient has been enrolled and first dose administered in its Polish Phase I/II clinical safety, tolerability and preliminary efficacy study of L-DOS47 in Poland.
Topical Interferon Alpha-2b research and development expenses for the three and six month periods ended January 31,
2013 totalled $134,000 and $585,000, respectively ($689,000 and $1,341,000 respectively for the three and six month
periods ended January 31, 2012). Beginning in Q4 of fiscal 2012, the Company initiated a downsizing of the staff in the Saskatoon laboratory. The Company proceeded with additional staff downsizing at its Saskatoon laboratory in October 2012, including a decision to close the Saskatoon laboratory by the end of November 2012. Costs associated with the downsizing were charged in Q1 of fiscal 2013. The Company has now limited ongoing activities 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.
The Company also incurred corporate research and development expenses for the three and six month periods ended
January 31, 2013 of $276,000 and $560,000 respectively ($547,000 and $1,012,000 respectively for the three and six
month periods ended January 31, 2012). The lower expenses can be attributed to a reduction in payroll expense
associated with headcount reductions of corporate research and development employees in addition to a reduction in
travel and consulting expenses.
Operating, general & administration
Operating, general and administration expenses for the three and six month periods ended January 31, 2013 totalled
$704,000 and $1,468,000 respectively and represents a decrease of $664,000 (48.5%) and $1,175,000 (44.5%) when
compared to the three and six month periods ended January 31, 2012. Lower operating, general and administration
expenses are the result of ongoing cost cutting measures by the Company, with the most significant 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
activities.
2012 AGM, Special Committee and Settlement
Expenses relating to the special committee of independent directors (the “Special Committee”) formed in connection with the Company’s contested annual general meeting of shareholders held on January 30, 2012 (the “2012 AGM”) and the
subsequent settlement agreement entered into with certain of the concerned shareholders (the “Settlement”). All of
these expenses were incurred during fiscal 2012.