Helix BioPharma Corp. (TSX: “HBP”), a an immuno-oncology company
developing drug candidates for the prevention and treatment of
cancer, today announced its financial results for the fiscal third
quarter ended April 30, 2020.
OVERVIEW
The Company reported a consolidated net loss and
total comprehensive loss of $2,594,000 ($0.02 loss per common
share) and $7,060,000 ($0.05 loss per common share), respectively
for the three and nine-month period ended April 30, 2020. For
the three and nine-month periods ended April 30, 2019, consolidated
net loss and total comprehensive loss of totalled $2,071,000 ($0.02
loss per common share) and $5,358,000 ($0.05 loss per common
share), respectively. This includes a net loss from
discontinued operations related to the Company’s plan to fully
divest of its Polish subsidiary. Helix Immuno-Oncology S.A.
(“HIO”), totalling $198,000 and $465,000, respectively for the
three and nine-month period ended April 30, 2020.
During the year, the Company disposed of a 49.0%
ownership in HIO, bringing the Company’s total ownership interest
as at April 30, 2020 to 51.0%. Subsequent to the Company’s
third fiscal quarter on June 25, 2020, the Company made the
following announcements relating to its Polish subsidiary:
- Entered into agreements with HIO, pursuant to which the Company
cancelled an aggregate amount of approximately $2.7 million of
intercompany debt owed to the Company by HIO. As a result, all
transferred assets related to Biphasix and V-DOS47 have been
automatically reassigned and transferred from HIO back to the
Company without any formality. The Company has also ceased
financing HIO with immediate effect.
- The Company approved an increase in share capital of HIO and
the issuance of up to 2.2 million Series B ordinary shares in the
capital of HIO to enable it to issue up to 2.2 million Series B
ordinary shares by way of a private placement financing for
aggregate gross proceeds of approximately 2.97 million Polish
zloty. HIO completed the private placement on July 8, 2020 and as a
result the Company's shareholding in HIO has been reduced to
approximately 42.5% of the outstanding shares of HIO.
- The Company accepted a non-binding term sheet offer from CAIAC
Fund Management AG, in its capacity as designated trustee of an
alternative investment fund that is currently in the process of
being established and authorized by the Financial Market Authority
in Liechtenstein (“FMA”). The terms of the offer provide for the
Company to sell its remaining holdings in HIO for gross proceeds of
6.7 million Polish zloty (approximately $2.3 million). The
transaction is scheduled to close on August 31, 2020, and is
subject to a number of conditions, including the approval of the
fund by the FMA; the raising of a minimum 7.3 million Polish zloty
by the fund as well as regulatory approval of the transaction, if
required. There can be no assurance that the closing of the
divestment will occur on the terms set out herein or at all.
The Company has also been in discussions with
various capital market firms, both in the U.S. and Canada, with the
goal of raising additional capital to further advance the Company’s
clinical development programs and to qualify for a NASDAQ
listing.
Research and development
Research and development costs for the three and
nine-month periods ended April 30, 2020 totalled $1,523,000 and
$4,601,000, respectively ($1,331,000 and $3,631,000 respectively
for the three and nine-month periods ended April 30, 2019).
The following table outlines research and
development expenditures for the Company’s significant research and
development projects:
|
For the three-month |
|
For the nine-month |
|
periods ended April 30 |
|
periods ended April 30 |
|
|
2020 |
|
|
2019 |
|
|
2020 |
|
|
2019 |
|
|
|
|
|
|
|
|
|
|
|
|
L-DOS47 |
$ |
1,141,000 |
|
$ |
1,054,000 |
|
$ |
3,616,000 |
|
$ |
2,703,000 |
CAR-T |
|
54,000 |
|
|
– |
|
|
54,000 |
|
|
333,000 |
Corporate research and
development expenses |
|
180,000 |
|
|
155,000 |
|
|
441,000 |
|
|
380,000 |
Trademark and patent related
expenses |
|
126,000 |
|
|
110,000 |
|
|
364,000 |
|
|
178,000 |
Depreciation expense |
|
13,000 |
|
|
12,000 |
|
|
38,000 |
|
|
37,000 |
Stock-based compensation
expense |
|
9,000 |
|
|
– |
|
|
88,000 |
|
|
– |
|
$ |
1,523,000 |
|
$ |
1,331,000 |
|
$ |
4,601,000 |
|
$ |
3,631,000 |
|
L-DOS47 research and development expenses for
the three and nine-month periods ended April 30, 2020 totalled
$1,141,000 and $3,616,000, respectively (April 30, 2019 -
$1,054,000 and $2,703,000, respectively). L-DOS47 research
and development expenditures relate primarily to the Company’s
LDOS001 Phase I clinical study in the U.S., the LDOS003 Phase II
clinical study in Poland and the Ukraine and the Company’s new
LDOS006 Phase Ib/II pancreatic clinical study in the U.S. The
increase in L-DOS47 expenditures in Q3 fiscal 2020 when compared to
Q3 fiscal 2019 reflects an increase of approximately $161,000 in
manufacturing activity to produce additional drug substance along
with an increased spend of approximately $386,000 in the Company’s
newly launched pancreatic clinical study in the U.S. The Company
commenced enrollment in the new pancreatic clinical study in
December 2019. Offsetting the increased spend in the quarter was a
reduction in spending of $279,000 related to the Company’s LDOS001
clinical study of L-DOS47 in combination with
pemetrexed/carboplatin in the U.S. and a further reduction of
$133,000 related to a research collaboration project that ended
involving the H. Lee Moffitt Cancer Centre & Research Institute
(“Moffitt”). The Company’s LDOS001 clinical study has completed
enrollment and the Company is working on finalizing data for
reporting. The LDOS003 clinical study had little impact on
spending in the quarter. The Company had previously made the
decision to not advance the study without entering a co-development
partnership with a third party and therefore previously made the
decision to terminate further recruitment and proceed to data
analysis.
For the nine-month period ending April 30, 2020
when compared to the nine-month period ended April 30, 2019 the
increase in spending mainly reflects drug substance manufacturing
spend of $498,000, costs associated with the new LDOS006 pancreatic
trial in the U.S. of $783,000 and costs associated to finalize and
report on LDOS001 of $252,000. Offsetting the increased spend
was a reduction in spending of $367,000 related to the Company’s
LDOS001 clinical study and a further reduction of $204,000 related
to the Moffitt research collaboration.
CAR-T research and development expenses for both
the three and nine-month periods ended April 30, 2020 totalled
$54,000 and $54,000, respectively (three and nine-month periods
ended April 30, 2019 - $333,000 and $333,000, respectively).
The Company’s collaboration with ProMab Biotechnologies Inc.
(“ProMab”) has been impacted by the Coronavirus pandemic and as
such certain planned activities have been deferred.
Trademark and patent related expenses for the
three and nine-month periods ended April 30, 2020 totalled $126,000
and $364,000, respectively (three and nine-month periods ended
April 30, 2019 - $110,000 and $178,000, respectively). The
Company continues to ensure it adequately protects its intellectual
property.
Stock based compensation expense for the three
and nine-month periods ended April 30, 2020 totalled $9,000 and
$88,000, respectively (three and nine-month periods ended April 30,
2019 - $nil and $nil, respectively). The amount represents
the expense associated with the vesting of stock options that were
granted, over their vesting period.
Operating, general and
administration
Operating, general and administration expenses
for the three and nine-month periods ended April 30, 2020 totalled
$862,000 and $1,986,000, respectively ($495,000 and $1,094,000
respectively for the three and nine-month periods ended April 30,
2019). The increase is mainly the result of higher expenses
associated with various third-party advisor services such as
investor and media relations, legal, business development
activities and investment banking services. The Company has been in
discussion with various advisory groups as it pursues a listing on
a recognized U.S. stock exchange, like the Nasdaq.
The following table outlines operating, general
and administration costs expensed for the following periods:
|
For the three-month |
|
For the nine-month |
|
periods ended April 30 |
|
periods ended April 30 |
|
|
2020 |
|
|
2019 |
|
|
2020 |
|
|
2019 |
|
|
|
|
|
|
|
|
|
|
|
|
Wages and benefits |
$ |
109,000 |
|
$ |
112,000 |
|
$ |
327,000 |
|
$ |
320,000 |
Director fees |
|
40,000 |
|
|
42,000 |
|
|
120,000 |
|
|
122,000 |
Third-party advisors |
|
396,000 |
|
|
280,000 |
|
|
978,000 |
|
|
462,000 |
Other general and
administrative |
|
101,000 |
|
|
59,000 |
|
|
278,000 |
|
|
183,000 |
Depreciation expense |
|
– |
|
|
2,000 |
|
|
1,000 |
|
|
5,000 |
Stock-based compensation
expense |
|
216,000 |
|
|
– |
|
|
282,000 |
|
|
2000 |
|
$ |
862,000 |
|
$ |
495,000 |
|
$ |
1,986,000 |
|
$ |
1,094,000 |
|
Stock based compensation expense for the three
and nine-month periods ended April 30, 2020 totalled $216,000 and
$282,000, respectively (three and nine-month periods ended April
30, 2019 - $nil and $2, respectively). The amount represents
the expense associated with the vesting of stock options that were
granted, over their vesting period.
LIQUIDITY AND CAPITAL
RESOURCES
As at April 30, 2020 the Company had working
capital of $3,826,000, shareholders’ equity of $3,934,000 and a
deficit of $178,427,000. As at July 31, 2019 the Company had
a working capital deficiency of $3,534,000, shareholders’
deficiency of $3,281,000 and a deficit of $171,531,000.
The Company experienced a working capital
deficiency for several quarters until August 21, 2019 when the
Company closed the first of a series of three private placements
which included January 13, 2020 and March 12, 2020 for total gross
proceeds of approximately $16,000,000. A portion of the private
placement financings included the total disposition of a 49.0%
stake of the Company’s Polish subsidiary, HIO. On April 30,
2020 the Company stake in HIO was 51.0% which was subsequently
reduced to 42.5% after HIO, on July 8, 2020, completed a direct
private placement with an investor. The Company previously
disclosed its intentions to fully divest of its interest in its
Polish subsidiary in order to raise additional capital to further
fund the Company’s clinical development programs while still
retaining licensing arrangements for future royalties and milestone
payments.
On June 25, 2020, the Company announced the
receipt and acceptance of a non-binding offer from CAIAC Fund
Management AG, in its capacity as designated trustee of an
alternative investment fund that is currently in the process of
being established and authorized by the Financial Market Authority
in Liechtenstein (“FMA”). The terms of the offer provide for the
Company to sell its remaining holdings in HIO for gross proceeds of
6.7 million Polish zloty (approximately $2.3 million). The
transaction is scheduled to close on August 31, 2020 and is subject
to a number of conditions. There can be no assurance that the
closing of the divestment will occur on the terms set out herein or
at all.
In addition, the Company has been in discussions
with various capital market firms, both in the U.S. and Canada,
with the goal of raising additional capital to qualify the Company
for a listing on a U.S. stock exchange such as NASDAQ in order to
further advance the Company’s clinical development programs.
The Company’s cash reserves of $4,989,000 as at
April 30, 2020 are insufficient to meet anticipated cash needs for
working capital and capital expenditures through the next twelve
months, nor are they sufficient to see planned research and
development initiatives through to completion. Though the
funds raised have assisted the Company in dealing with its working
capital deficiency, additional funds are required to advance the
Company’s clinical and preclinical programs and deal with working
capital requirements 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 Condensed Interim Consolidated
Statement of Net Loss and Comprehensive Loss for the three and
nine-month periods ending April 30, 2020 and 2019 and the Condensed
Interim Consolidated Statement of Cash Flows for the nine-month
periods ending April 30, 2020 and 2019 are summarized below:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Condensed Interim Consolidated Statement of Net Loss and
Comprehensive Loss |
|
|
|
|
|
|
Condensed Interim Consolidated Statement of Cash Flows |
|
|
|
|
(thousand $, except for per share data) |
|
|
|
|
|
|
|
|
(thousand $) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the three-months ended April 30 |
|
For the nine-months ended April 30 |
|
|
|
|
For the nine-months ended April 30 |
|
|
|
2020 |
2019 |
|
2020 |
2019 |
|
|
|
|
2020 |
2019 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Expenses: |
|
|
|
|
|
|
|
|
Cash flows from operating activities: |
|
|
|
|
Research and development |
|
1,523 |
1,331 |
|
4,601 |
3,631 |
|
|
Net loss from continuing operations |
|
(6,595) |
(4,770) |
|
Operating, general, administration |
|
862 |
495 |
|
1,986 |
1,094 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Items not involving cash |
|
427 |
84 |
|
Results from operating activities |
|
|
|
|
|
|
|
|
Changes in non-cash working capital |
|
(2,334) |
830 |
|
before finance items |
|
(2,385) |
(1,826) |
|
(6,587) |
(4,725) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash used in operating activities: |
|
|
|
|
Finance items |
|
(11) |
(30) |
|
(8) |
(45) |
|
|
From continuing operations |
|
(8,502) |
(3,856) |
|
|
|
|
|
|
|
|
|
|
From discontinued operations |
|
(464) |
(486) |
|
Net loss from continuing operations |
|
(2,396) |
(1,856) |
|
(6,595) |
(4,770) |
|
|
|
|
(8,966) |
(4,342) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss from discontinuing operations |
|
(198) |
(215) |
|
(465) |
(588) |
|
|
Cash used in financing activities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
From continuing operations |
|
12,184 |
4,963 |
|
Net loss and total comprehensive loss |
|
(2,594) |
(2,071) |
|
(7,060) |
(5,358) |
|
|
From discontinued operations |
|
- |
- |
|
|
|
|
|
|
|
|
|
|
|
|
12,184 |
4,963 |
|
Add: Net loss and total comprehensive loss, |
|
|
|
|
|
|
|
|
|
|
|
|
attributable to non-controlling interest |
|
105 |
- |
|
164 |
- |
|
|
Cash used in investing activities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
From continuing operations |
|
1,704 |
(2) |
|
Net loss and total comprehensive loss, |
|
|
|
|
|
|
|
|
From discontinued operations |
|
- |
- |
|
attributable to Helix BioPharma Corp. |
|
(2,489) |
(2,071) |
|
(6,896) |
(5,358) |
|
|
|
|
1,704 |
(2) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Exchange rate changes on cash |
|
(27) |
(32) |
|
Loss per share |
|
-$ 0.02 |
-$ 0.02 |
|
-$ 0.05 |
-$ 0.05 |
|
|
|
|
|
|
|
* Figures are for both basic and fully diluted |
|
|
|
|
|
|
|
|
Net increase (decrease) in cash |
|
4,895 |
587 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash beginning of the period |
|
94 |
229 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash end of the period |
|
4,989 |
816 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The Company’s Condensed Interim Consolidated
Statement of Financial Position as at April 30, 2020 and July 31,
2019 are summarized below.
Condensed Interim Consolidated Statement of Financial Position |
|
|
|
(thousand $) |
|
|
|
|
|
|
April 30, 2020 |
|
July 31, 2019 |
|
|
|
|
|
Non current assets |
|
108 |
|
253 |
|
|
|
|
|
Current assets: |
|
|
|
|
Assets held for sale |
|
126 |
|
- |
Prepaids |
|
142 |
|
191 |
Accounts receivable |
|
196 |
|
290 |
Cash |
|
4,989 |
|
206 |
|
|
5,453 |
|
687 |
|
|
|
|
|
Total assets |
|
5,561 |
|
940 |
|
|
|
|
|
Shareholders' equity / (deficiency) |
|
|
|
Attributable to owners of the Company |
4,788 |
|
(3,281) |
Non-controlling interest |
|
(854) |
|
- |
|
|
3,934 |
|
(3,281) |
Current liabilities: |
|
|
|
|
Liabilities related to assets held for sale |
66 |
|
- |
Deferred government grant |
|
- |
|
124 |
Accrued liabilities |
|
471 |
|
1,057 |
Accounts payable |
|
1,090 |
|
3,040 |
|
|
1,627 |
|
4,221 |
|
|
|
|
|
Total liabilities & shareholders' equity |
5,561 |
|
940 |
|
The Company’s condensed interim consolidated
financial statements and management’s discussion and analysis will
be filed under the Company’s profile on SEDAR at www.sedar.com, as
well as on the Company’s website.
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 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, 2019 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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