Helix BioPharma Corp. (TSX, FSE: “HBP”), an immuno-oncology company
developing drug candidates for the prevention and treatment of
cancer, today announced its financial results for the year ended
July 31, 2018.
FINANCIAL REVIEW
The Company recorded a net loss and total
comprehensive loss of $8,625,000 and $10,059,000 (a loss per common
share of $0.09 and $0.11) for the fiscal years ended July 31, 2018
and 2017 respectively.
Research and development
Research and development expenses totalled
$6,084,000 and $6,524,000, respectively for the twelve-month
periods ended July 31, 2018 and 2017.
The following table outlines research and
development costs expensed and investment tax credits for the
Company’s significant research and development projects for the
fiscal years ended July 31:
|
|
2018 |
|
|
2017 |
|
L-DOS47 |
$ |
4,893,000 |
|
$ |
5,496,000 |
|
V-DOS47 |
|
457,000 |
|
|
372,000 |
|
CAR-T |
|
318,000 |
|
|
259,000 |
|
Corporate research and
development expenses |
|
432,000 |
|
|
474,000 |
|
Trademark and patent
related expenses |
|
440,000 |
|
|
361,000 |
|
Stock-based
compensation expense |
|
10,000 |
|
|
24,000 |
|
Depreciation
expense |
|
141,000 |
|
|
103,000 |
|
Research and
development investment tax credit |
|
(132,000 |
) |
|
(230,000 |
) |
Polish government grant
subsidy (V-DOS47) |
|
(475,000 |
) |
|
(335,000 |
) |
|
$ |
6,084,000 |
|
$ |
6,524,000 |
|
|
|
|
|
|
|
|
L-DOS47 research and development expenses for
fiscal 2018 totalled $4,893,000 (2017 - $5,496,000). L-DOS47
research and development expenditures relate primarily to the
Company’s LDOS002 European Phase I/II clinical study in Poland,
LDOS001 Phase I clinical study in the U.S., and preliminary
expenditures related to the Company’s LDOS003 Phase II clinical
study in Poland and the Ukraine.
The Company stopped further enrolment in the
second stage of the Phase I/II component of the study due to lack
of efficacy as defined by protocol. The final analysis has
been completed and the Company is currently awaiting the clinical
study report. In addition, given the limited cash resources,
the LDOS003 clinical trial which was previously planned to commence
enrolment in early 2018 had not moved forward though the Company is
still committed to advance the program. The Company continues
to be committed to the LDOS001 study and has re-allocated resources
to improve patient enrollment. An amendment to the LDOS001 study
protocol allowed the Company to advance enrollment from Cohort two
at the beginning of the 2018 fiscal year to where it was most
recently announced that the Company commenced enrolment in the
final two cohorts of the study which is now enrolling patients in
Cohort six. In addition, the Company has begun early
development of a Phase I/II study, L-DOS47 given in combination
with doxorubicin, for the treatment of metastatic pancreatic
cancer. An initial draft study protocol was circulated in July 2018
and ongoing development continues.
V-DOS47 research and development expenses for
fiscal 2018 totalled $457,000 (2017 - $372,000). The higher
expenditures in the current year mainly reflect the increase in
staff and consultants as the Polish subsidiary ramped up activities
in the program. In fiscal 2016 the Company established a
wholly-owned subsidiary in Poland and entered into a grant funding
agreement with the Polish National Centre for Research and
Development (“PNCRD”) for research and development expenditures
associated with V-DOS47. The Company’s subsidiary received
$475,000 and $335,000 in fiscal 2018 and 2017, respectively, from
the PNCRD.
CAR-T research and development expenses for
fiscal 2018 and 2017 totalled $318,000 (2017 - $259,000).
During the current fiscal year, the Company announced a
collaboration agreement related to novel CAR-T therapeutics and new
antibody-based technologies for cell-based therapies.
Corporate research and development expenses were
relatively flat for fiscal 2018 and 2017 and totalled $432,000
(2017 - $474,000).
Trademark and patent related expenses for fiscal
2018 and 2017 totalled $440,000 (2017 - $361,000). The
Company continues to ensure it works to adequately protect its
intellectual property.
Operating, general and
administration
Operating, general and administration expenses
totalled $2,462,000 and $3,738,000, respectively for the fiscal
years ended July 31, 2018 and 2016. The decrease in operating,
general and administration expenses reflects the Company’s cost
cutting initiatives. The Company eliminated the
employment/contractual arrangement with its then CEO, who was also
a director of the Company, and also let go if it’s controller as
part of a headcount reduction plan. Aggressive steps were
also taken to reduce unnecessary expenditures such as travel and
conferences. In addition, various third-party contracts were
also eliminated. During the fiscal year the Company hired Deloitte
as strategic advisor to explore partnering and licensing
opportunities. Cost reductions in Canada were offset by
operating, general and administrative expenditure increases
incurred at the Company’s Polish subsidiary.
LIQUIDITY AND CAPITAL
RESOURCES
As at July 31, 2018 the Company had a working
capital deficiency of $1,901,000 (2017 - $504,000), shareholders’
deficiency of $1,527,000 (2017 - $17,000) and a deficit of
$164,005,000 (2017 - $155,380,000).
The Company’s cash reserves of $366,000, as at
July 31, 2018 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 initiatives through to completion. Subsequent to
the Company’s fiscal year ending July 31, 2018, the Company closed
two additional private placements for gross proceeds of
$1,274,000. Though the funds raised have assisted the Company
in dealing with the working capital deficiency, additional funds
are required to advance the various clinical and preclinical
programs and pay for the Company’s overhead costs. 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 critical for its development
needs.
The Company’s Consolidated Statement of
Financial Position as at July 31, 2018 and July 31, 2017 is
summarized below.
Consolidated Statement of
Financial Position (thousand $) |
|
|
31-Jul-18 |
|
31-Jul-17 |
|
|
|
|
|
Non current assets |
|
374 |
|
487 |
|
|
|
|
|
Current assets: |
|
|
|
Prepaids |
|
92 |
|
173 |
|
Accounts receivable |
|
315 |
|
630 |
|
Cash |
|
366 |
|
897 |
|
|
|
773 |
|
1,700 |
|
Total assets |
|
1,147 |
|
2,187 |
|
|
|
|
|
Shareholders' deficiency |
|
(1,527 |
) |
(17 |
) |
|
|
|
|
Current liabilities: |
|
|
|
Deferred government grant |
|
38 |
|
44 |
|
Accrued liabilities |
|
644 |
|
722 |
|
Accounts payable |
|
1,992 |
|
1,438 |
|
|
|
2,674 |
|
2,204 |
|
Total liabilities &
shareholders deficiency |
1,147 |
|
2,187 |
|
|
|
|
|
|
The Company’s Consolidated Statement of Net Loss
and Comprehensive Loss and Consolidated Statement of Cash Flow for
fiscal 2018 and 2017 are summarized below:
Consolidated Statements of Net
Loss and Comprehensive Loss |
|
|
|
Consolidated Statements of Cash Flows |
|
|
|
(thousand $, except for per
share data) |
|
|
|
(thousand $) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the year ended |
|
|
|
|
|
For the year ended |
|
|
|
Jul-31 |
|
|
Jul-31 |
|
|
|
|
|
|
Jul-31 |
|
Jul-31 |
|
|
|
|
2018 |
|
|
2017 |
|
|
|
|
|
|
2018 |
|
2017 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Expenses: |
|
|
|
|
|
|
Cash provided by (used in): |
|
|
|
Research and development |
|
6,084 |
|
|
6,524 |
|
|
|
|
|
Net loss and total comprehensive loss |
(8,625 |
) |
(10,059 |
) |
|
Operating, general, administration |
|
2,462 |
|
|
3,738 |
|
|
|
|
|
|
|
|
|
Gain on sale property, plant, equipment |
|
- |
|
|
(168 |
) |
|
|
|
|
Items not involving cash: |
|
|
|
|
|
|
|
|
|
|
Depreciation |
165 |
|
130 |
|
|
Results from operating activities |
|
|
|
|
|
|
Stock-based compensation |
10 |
|
159 |
|
|
before finance items |
|
(8,546 |
) |
|
(10,094 |
) |
|
|
|
|
Foreign exchange loss (gain) |
60 |
|
(33 |
) |
|
|
|
|
|
|
|
|
Gain on sale property, plant, equipment |
- |
|
(168 |
) |
|
Finance items |
|
(79 |
) |
|
35 |
|
|
|
|
|
|
235 |
|
88 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Changes in non-cash working capital |
866 |
|
676 |
|
|
Loss and total comprehensive loss |
|
(8,625 |
) |
|
(10,059 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating activities |
(7,524 |
) |
(9,295 |
) |
|
Loss per share |
-$ |
0.09 |
|
-$ |
0.11 |
|
|
|
|
|
|
|
|
|
* Figures are for both basic
and fully diluted |
|
|
|
|
|
Financing activities |
7,105 |
|
6,719 |
|
|
|
|
|
|
|
|
|
Investing activities |
(53 |
) |
(214 |
) |
|
|
|
|
|
|
|
|
Exchange rate changes on cash |
(59 |
) |
33 |
|
|
|
|
|
|
|
|
|
Net increase (decrease) in cash |
(531 |
) |
(2,757 |
) |
|
|
|
|
|
|
|
|
Cash beginning of the period |
897 |
|
3,654 |
|
|
|
|
|
|
|
|
|
Cash end of the period |
366 |
|
897 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The Company’s consolidated financial statements,
management’s discussion and analysis and annual information form
will be filed under the Company’s profile on SEDAR at
www.sedar.com, as well as on the Company’s website at
www.helixbiopharma.com.
About Helix BioPharma Corp.
Helix BioPharma Corp. is an immuno-oncology
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. Helix is currently listed on the TSX and FSE under the
symbol “HBP”.
INVESTOR RELATIONS
Helix BioPharma Corp.9120 Leslie Street, Suite
205Richmond Hill, Ontario, L4B 3J9Tel: (905) 841-2300Email:
ir@helixbiopharma.com
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 Company’s activities relating to DOS47, 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 priority continuing to be
L-DOS47; (iii) the Company’s development programs for DOS47,
L-DOS47, V-DOS47 and CAR-T; (iv) future expenditures, the
insufficiency of the Company’s current cash resources and the need
for financing; and (v) future financing requirements and the
seeking of additional funding. Forward-looking statements can
further be identified by the use of forward-looking terminology
such as “ongoing”, “estimates”, “expects”, 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”, 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;
that sufficient financing will be obtained in a timely manner to
allow the Company to continue operations and implement its clinical
trials in the manner and on the timelines anticipated; the timely
provision of services and supplies or other performance of
contracts by third parties; future costs; the absence of any
material changes in business strategy or plans; and the timely
receipt of required regulatory approvals and strategic partner
support.
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, and that clinical trials may not commence or
complete within anticipated timelines or the anticipated budget 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 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 the Company’s annual management’s discussion and
analysis for the year ended July 31, 2017 under the heading “Risks
and Uncertainty” and Helix’s Annual Information Form, in particular
under the headings “Forward-looking Statements” and “Risk Factors”,
and other reports filed under the Company’s profile on SEDAR at
www.sedar.com from time to time. 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 the Company 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.
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