Helix Biopharma Corp. Announces Fiscal Third Quarter 2020 Results
RICHMOND HILL, Ontario, July 30, 2020 (GLOBE NEWSWIRE) -- 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 | |||||||||||
By: GlobeNewswire
- 30 Jul 2020
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