Helix BioPharma Corp. (TSX: “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, 2019.
FINANCIAL REVIEW
The Company recorded a net loss and total
comprehensive loss of $7,526,000 and $8,625,000 (a loss per common
share of $0.07 and $0.09) for the fiscal years ended July 31, 2019
and 2018 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:
|
|
2019 |
|
|
2018 |
|
|
|
|
L-DOS47 |
$ |
3,530,000 |
|
$ |
4,893,000 |
|
V-DOS47 |
|
478,000 |
|
|
457,000 |
|
CAR-T |
|
333,000 |
|
|
318,000 |
|
Corporate research and
development expenses |
|
528,000 |
|
|
432,000 |
|
Trademark and patent related
expenses |
|
435,000 |
|
|
440,000 |
|
Stock-based compensation
expense |
|
198,000 |
|
|
10,000 |
|
Depreciation expense |
|
109,000 |
|
|
141,000 |
|
Research and development
investment tax credit |
|
(126,000 |
) |
|
(132,000 |
) |
Polish government grant subsidy
(V-DOS47) |
|
(479,000 |
) |
|
(475,000 |
) |
|
|
|
|
$ |
5,006,000 |
|
$ |
6,524,000 |
|
L-DOS47 research and development expenses for fiscal 2019
totalled $3,530,000 (2018 - $4,893,000). L-DOS47 research and
development expenditures relate primarily to the Company’s LDOS001
Phase I clinical study in the U.S., the LDOS002 European Phase I/II
clinical study in Poland, the LDOS003 Phase II clinical study in
Poland and the Ukraine and the Company’s newly approved Phase Ib/II
clinical study in the U.S.
The Company’s overall reduction in research and
development spend when compared to the previous fiscal year is the
result of the Company’s non-small cell lung cancer studies
(LDOS001, and LDOS002) all being in the late stage of development
within their respective clinical phases while at the same time, the
Company started ramping up activity of its newly approved
investigational new drug clinical study for advanced pancreatic
cancer (LDOS006).Patient recruitment for LDOS001 was closed on July
1, 2019. The Company expects to have a final clinical study
report for LDOS001 no later than the first calendar quarter of
2020. As for LDOS002, all analyses have been completed and a
draft clinical study report is currently under review and expected
to be finalized by the end of calendar 2019. LDOS003 is
currently in the last cohort awaiting one more patient to be
enrolled to complete the dose escalating portion of the
study. The Company has indicated that it would not be moving
forward into the randomized portion of the study unless certain
clinical objectives are met in the dose escalating phase and
sufficient capital is obtained, or the Company enters into a
co-development partnership with a third party. The Company
expects to start enrolling patients in LDOS006 starting December
2019.
The Company’s Polish subsidiary entered into a
grant funding agreement with the National Centre for Research and
Development for research and development expenditures associated
with V-DOS47. V-DOS47 research and development expenses for
fiscal 2019 totalled $478,000 (2018 - $457,000). Research and
development expenditures in the program remained flat when compared
to fiscal 2018. In fiscal 2019, the Company’s Polish
subsidiary received grant funding of $479,000 (2018 -
$475,000). The Company previously disclosed that it was
looking to dispose of its ownership position in its Polish
subsidiary while retaining licensing agreement for future
milestones and royalty payments. More recently, as part of a
financing on August 21, 2019 for gross proceeds of $7,000,005, the
Company disposed 25% of its investment in its Polish
subsidiary. The Company’s plans to divest its entire interest
in its Polish subsidiary while retaining agreements for future
milestone and royalties.
CAR-T research and development expenses for
fiscal 2019 totalled $333,000 (2018 - $318,000). The Company
commenced development of novel CAR-T therapeutics and new
antibody-based technologies for cell-based therapies. The Company’s
CAR-T expenditures relate primarily to collaborative research
activities with ProMab Biotechnologies Inc.
Corporate research and development expenses for
fiscal 2019 totalled $528,000 (2018 - $432,000). The increase
in corporate research and development expenditures mainly
represents a bonus payout to the Chief Executive Officer.
Trademark and patent related expenses for fiscal
2019 totalled $435,000 (2018 - $440,000). The Company
continues to ensure it adequately protects its intellectual
property.
Operating, general and
administration
Operating, general and administration expenses
for fiscal 2019 totalled $2,486,000 (2018 - $2,462,000). Operating,
general and administration expenses remained relatively flat.
The Increase in wages and benefits and stock-based compensation
were offset by a reduction in lower director fees and other general
and administrative expenditures. The increase in wages &
benefits and stock-based compensation is the result of a bonus
payout to the CFO and stock options granted to administrative
employees and non-management directors. The reduction in director
fees reflects a reduction in committee and board meetings held as
well as a reduction in the number of directors on the board of the
company. Limited working capital throughout the year resulted
in reductions in other general and administrative spending
activity.
LIQUIDITY AND CAPITAL
RESOURCES
As at July 31, 2019 the Company had a working
capital deficiency of $3,534,000 (2018 - $1,901,000), shareholders’
deficiency of $3,281,000 (2018 - $1,527,000) and a deficit of
$171,531,000 (2018 - $164,005,000).
The Company raised gross proceeds of
approximately $6,523,000 in fiscal 2019. The Company’s cash
reserves of $206,000 as at July 31, 2019 in addition to the
subsequent private placements the Company closed on August 21, 2019
for gross proceeds of approximately $7,000,005 are insufficient to
meet anticipated cash needs for working capital and capital
expenditures through the next twelve months, and 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 Consolidated Statement of
Financial Position as at July 31, 2019 and July 31, 2018 is
summarized below.
Consolidated Statement of Financial Position (thousand $) |
|
|
|
|
|
|
31-Jul-19 |
|
31-Jul-18 |
|
|
|
|
|
Non
current assets |
|
253 |
|
374 |
|
|
|
|
|
Current
assets: |
|
|
|
Prepaids |
|
191 |
|
92 |
|
Accounts receivable |
|
290 |
|
315 |
|
Cash |
|
206 |
|
366 |
|
|
|
687 |
|
773 |
|
Total
assets |
|
940 |
|
1,147 |
|
|
|
|
|
Shareholders' deficiency |
|
(3,281 |
) |
(1,527 |
) |
|
|
|
|
Current
liabilities: |
|
|
|
Deferred government grant |
|
124 |
|
38 |
|
Accrued liabilities |
|
1,057 |
|
644 |
|
Accounts payable |
|
3,040 |
|
1,992 |
|
|
|
4,221 |
|
2,674 |
|
Total liabilities & shareholders deficiency |
940 |
|
1,147 |
|
The Company’s Consolidated Statement of Net Loss and
Comprehensive Loss and Consolidated Statement of Cash Flow for
fiscal 2019 and 2018 are summarized below:
|
|
|
|
|
|
|
|
|
|
|
Consolidated Statements of Net Loss and Comprehensive Loss |
|
Consolidated Statements of Cash Flows |
|
|
|
|
(thousand
$, except for per share data) |
|
|
(thousand
$) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the year ended |
|
|
|
|
For the year ended |
|
|
|
|
Jul-31 |
|
|
Jul-31 |
|
|
|
|
|
Jul-31 |
|
Jul-31 |
|
|
|
|
|
2019 |
|
|
2018 |
|
|
|
|
|
2019 |
|
2018 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Expenses: |
|
|
|
|
|
Cash
provided by (used in): |
|
|
|
|
Research and development |
|
|
5,006 |
|
|
6,084 |
|
|
|
Net loss and total comprehensive loss |
|
(7,526 |
) |
(8,625 |
) |
|
Operating, general, administration |
|
|
2,486 |
|
|
2,462 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Items not
involving cash: |
|
|
|
|
Results
from operating activities |
|
|
|
|
|
Depreciation |
|
125 |
|
165 |
|
|
before finance items |
|
|
(7,492 |
) |
|
(8,546 |
) |
|
|
Stock-based compensation |
|
361 |
|
10 |
|
|
Finance
items |
|
|
(34 |
) |
|
(79 |
) |
|
|
Foreign exchange loss (gain) |
|
36 |
|
60 |
|
|
|
|
|
|
|
|
|
|
522 |
|
235 |
|
|
Loss and
total comprehensive loss |
|
|
(7,526 |
) |
|
(8,625 |
) |
|
|
Changes in non-cash working capital |
|
1,473 |
|
866 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss per
share |
|
-$ |
0.07 |
|
-$ |
0.09 |
|
|
|
Operating
activities |
|
(5,531 |
) |
(7,524 |
) |
|
* Figures
are for both basic and fully diluted |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Financing
activities |
|
5,411 |
|
7,105 |
|
|
|
|
|
|
|
|
Investing
activities |
|
(4 |
) |
(53 |
) |
|
|
|
|
|
|
|
Exchange
rate changes on cash |
|
(36 |
) |
(59 |
) |
|
|
|
|
|
|
|
Net
increase (decrease) in cash |
|
(160 |
) |
(531 |
) |
|
|
|
|
|
|
|
Cash
beginning of the period |
|
366 |
|
897 |
|
|
|
|
|
|
|
|
Cash end
of the period |
|
206 |
|
366 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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 and Chimeric Antigen Receptor (“CAR”) based cell
therapies. 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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