On December 13, 2019 Helix BioPharma Corp. (TSX, FSE: "HBP"), a an immuno-oncology company developing drug candidates for the prevention and treatment of cancer, reported its financial results for the first quarter of fiscal 2020 ending October 31, 2019 (Press release, Helix BioPharma, DEC 13, 2019, View Source [SID1234552356]).

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OVERVIEW

The Company recorded a net loss and total comprehensive loss, including non-controlling interest of $2,211,000 ($0.02 loss per common share) and $1,379,000 ($0.01 loss per common share) for the three-month periods ended October 31, 2019 and 2018, respectively. Fluctuations in net loss and total comprehensive loss is mainly the result of cash reserves available to be deployed on ongoing research and development activities and operating, general and administration expenses.

The Company experienced a working capital deficiency for several quarters until recently when on August 21, 2019 the Company closed a private placement financing for gross proceeds of $7,000,005 which included the disposition of a 25% stake in the Company’s Polish subsidiary, Helix Immuno-Oncology S.A. As previously disclosed, the Company intends to fully divest its remaining interest in its Polish subsidiary to raise additional capital to fund the Company’s clinical development programs while retaining licensing agreements for future royalties and milestones payments.

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 sufficient 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.

On December 11, 2019 the Company announced that patient enrollment and screening had commenced on its Phase Ib/II clinical study in the U.S. The study is entitled "A Phase Ib/II Study of the Microenvironment Modifier L-DOS47 plus Doxorubicin for the Treatment of Patients with Previously Treated Advanced Pancreatic Cancer". The Phase Ib portion of the study involves three dose escalating cohorts enrolling a total of nine (9) patients. The Phase II portion of the study will enroll an additional eleven (11) patients depending on meeting safety and efficacy criteria.

Research and development Research and development costs for the three-month periods ended October 31, 2019 and 2018 totalled $1,511,000 and $1,014,000, respectively. The following table outlines research and development costs expensed for the Company’s significant research and development projects for the three-month periods ending October 31: 2019 2018

L-DOS47 research and development expenses for the three-month periods ended October 31, 2019 and 2018 totalled $1,211,000 and $861,000, respectively.

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. (LDOS006).

As a result of closing a private placement for gross proceeds of $7,000,005 on August 21, 2019, the Company committed to various expenditures related to its L-DOS47 clinical development program, specifically as it relates to the Company’s’ recently approved IND clinical study for previously treated advanced pancreatic cancer (LDOS006). The Company expects to enrol the first patient by the end of the calendar year 2019. In the meantime, the Company’s other NSCLC studies (LDOS001 and LDOS002) are both in late stages of development within their respective clinical phases and the Company is working on finalizing the data for reporting.

V-DOS47 research and development expenses for the three-month periods ended October 31, 2019 and 2018 totalled $111,000 and $130,000, respectively. The Company’s wholly owned subsidiary in Poland has 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 $27,000 and $135,000 in the three-month periods ended October 31, 2019 and 2018, respectively, from the PNCRD.

Trademark and patent related expenses for the three-month periods ended October 31, 2018 and 2017 totalled $153,000 and $25,000, respectively. The Company continues to ensure it adequately protects its intellectual property.

Operating, general and administration Operating, general and administration expenses for the three-month periods ended October 31, 2019 and 2018 totalled $709,000 and $373,000, respectively. The increase in operating, general and administration expenses mainly reflects higher third-party advisor expenditures such as legal & accounting, investor & media relations, investment banking services and stock-based compensation from options granted over their vesting period. In addition, the much lower operating expenditures for the three-month period ending October 31, 2018 was also the result of cost cutting initiatives.

LIQUIDITY AND CAPITAL RESOURCES
The Company reported a consolidated net loss and total comprehensive loss including non-controlling interest of $2,211,000 for the three-month period ended October 31, 2019 (October 31, 2018-$1,379,000). As at October 31, 2019 the Company has working capital of $430,000, shareholders’ equity of $666,000 and a deficit of $173,707,000. 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 fiscal quarters, until recently when on August 21, 2019 the Company closed a private placement financing for gross proceeds of $7,000,005 which included a disposition of a 25% stake in the Company’s Polish subsidiary, Helix Immuno-Immunology S.A. As previously disclosed, the Company intends to fully divest its remaining interest in its Polish subsidiary to raise additional capital to fund the Company’s clinical development programs for future royalties and milestone payments.

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 sufficient 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 $1,650,000 as at October 31, 2019 in addition to the subsequent private placement the Company closed on August 21, 2019 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. 3

The Company’s Consolidated Statement of Net Loss and Comprehensive Loss and Consolidated Statement of Cash Flow for the three-month periods ended October 31, 2019 and 2018 are summarized below: The Company’s condensed unaudited 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.