On June 12, 2018 Helix BioPharma Corp. (TSX: HBP) (FRANKFURT: HBP) ("Helix" or the "Company"), a clinical stage
immuno-oncology company developing innovative drug candidates for the prevention and treatment of cancer, reported its financial results for its fiscal quarter ended April 30, 2018 (Press release, Helix BioPharma, JUN 12, 2018, View Source [SID1234527598]).
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FINANCIAL REVIEW
The Company recorded a net loss and total comprehensive loss of $2,147,000 ($0.02 loss per common share) and $2,913,000 ($0.03 loss per common share) for the three-month periods ended April 30, 2018 and 2017, respectively. For the nine-month periods ended April 30, 2018 and 2017, respectively, the Company recorded a net loss and total comprehensive loss of $7,105,000 ($0.07 loss per common share) and $8,819,000 ($0.10 loss per common share).
Research and development
Research and development costs for the three and nine-month periods ended April 30, 2018 totalled $1,435,000 and $5,095,000,respectively ($1,932,000 and $6,111,000 respectively for the three and nine-month periods ended April 30, 2017).
L-DOS47 research and development expenses for the three and nine-month periods ended April 30, 2018 totalled $1,029,000 and $4,039,000, respectively ($1,208,000 and $4,480,000 respectively for the three and nine-month periods ended April 30, 2017). L-DOS47 research and development expenditures relate primarily to the Company’s LDOS002 European Phase I/II clinical study in Poland, its LDOS001 Phase I clinical study in the U.S., preliminary expenditures related to the Company’s LDOS003 Phase II clinical study in Poland and the Ukraine and various other expenditures in support of the Company’s overall L-DOS47 program.
The Company’s LDOS001 clinical study has been facing patient enrolment challenges and as a result the Company most recently increased start-up activities to add 6 additional clinical study sites, with planned recruitment to begin mid-summer 2018. In addition, an accelerated dosing protocol has been approved to help accelerate the LDOS001 clinical study. On May 30th, 2018, the Company announced the completion of the third cohort and the initiation of enrollment in the fourth cohort of the LDOS001 clinical study. Enrolment in the Company’s LDOS002 clinical study was previously terminated due to lack of efficacy and the Company is currently awaiting the finalized reports. Given the limited cash resources, the Company has slowed down the previously committed LDOS003 clinical trial which the Company previously planned to commence enrolment in early 2018.
V-DOS47 research and development expenses for the three and nine-month periods ended April 30, 2018 totalled $133,000 and $310,000, respectively ($309,000 and $659,000 respectively for the three and nine-month periods ended April 30, 2017). For the three and nine-month periods ended April 30, 2018 the Company’s Polish subsidiary received grant funding of $144,000 and $344,000, respectively ($92,000 and $228,000 respectively for the three and nine-month periods ended April 30, 2017). The higher expenditures in the prior year mainly reflect the increase in staff and consulting agreements as the Polish subsidiary ramped up activities in the V-DOS47 program. The Company’s wholly owned subsidiary in Poland has entered into a grant funding agreement with the Polish National Centre for Research and Development for research and development expenditures associated with VDOS47.
CAR-T research and development expenses for the three and nine-month periods ended April 30, 2018 totalled $192,000 and $317,000 respectively ($259 and $259 respectively for the three and nine-month periods ended April 30, 2017). During the current fiscal year, the Company commenced development of novel CAR-T therapeutics and new antibody-based technologies for cellbased therapies. The Company’s CAR-T expenditures relate primarily to collaborative research activities with ProMab Biotechnologies Inc.
Corporate research and development expenses for the three and nine-month periods ended April 30, 2018 totalled $122,000 and $346,000 respectively ($170,000 and $672,000 respectively for the three and nine-month periods ended April 30, 2017). Corporate research and development expenditures mainly reflect wages and benefits and related expenses associated with corporate head office staff. The reduction mainly reflects lower wages because of cost cutting initiatives to reduce headcount and third-party consulting costs.
Trademark and patent related expenses for the three and nine-month periods ended April 30, 2018 totalled $70,000 and $308,000, respectively ($75,000 and $197,000 respectively for the three and nine-month periods ended April 30, 2017). The Company continues to ensure it adequately protects its intellectual property.
Operating, general and administration Operating, general and administration expenses for the three and nine-month periods ended April 30, 2018 totalled $686,000 and $1,856,000, respectively ($944,000 and $2,826,000 respectively for the three and nine-month periods ended April 30, 2017). The decrease in operating, general and administration expenses reflects the Company’s cost cutting initiatives. The Company
eliminated the employment arrangement with its then CEO, who was also a director of the Company, and let go of its controller as part of a headcount reduction plan. Aggressive steps were also taken to reduce unnecessary expenditures such as travel, conferences, etc.…. In addition, various third-party contracts were also eliminated. During the fiscal quarter, the Company hired Deloitte as strategic advisor to explore partnering and licensing opportunities. Cost reductions taken at the head office were partially offset by operating, general and administrative expenditures being incurred at the Company’s newly formed subsidiary in Poland which mainly reflect salaries and benefits, legal and accounting services and overhead costs associated with the administrative office.
The Company recorded a net loss and total comprehensive loss of $2,147,000 ($0.02 loss per common share) and $2,913,000 ($0.03 loss per common share) for the three-month periods ended April 30, 2018 and 2017, respectively. For the nine-month periods ended April 30, 2018 and 2017, respectively, the Company recorded a net loss and total comprehensive loss of $7,015,000 ($0.07 loss per common share) and $8,819,000 ($0.10 loss per common share).
As at April 30, 2018 the Company had a working capital deficiency of $1,915,000, a shareholders’ deficiency of $1,507,000 and a deficit of $162,395,000. As at July 31, 2017 the Company had a working capital deficiency of $504,000, shareholders’ deficiency of $17,000 and a deficit of $155,380,000.
The Company continues to work with vendors to manage its cash position while ensuring vendors continue providing services while being paid, albeit over a longer period of time than previously agreed terms. The Company has raised approximately $6,913,000 from private placement financings during the current fiscal year. Nevertheless, the Company’s cash reserves of $770,000 as at April 30, 2018 in addition to the subsequent private placement on June 7, 2018 for gross proceeds of approximately $941,000 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 or any planned research and development initiatives through to completion.
Though the funds raised have somewhat assisted the Company in dealing with its working capital deficiency and attempts to make vendors current, additional funds are required to advance the various clinical and preclinical programs, pay for the Company’s overhead costs and its past due vendors. 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.
Additional information can be found about the Company’s liquidity and capital resources in the Company’s Management
Discussion and Analysis.
The Company’s condensed unaudited interim consolidated statement of net loss and comprehensive loss for the three and ninemonth periods ending April 30, 2018 and 2017 and the condensed unaudited interim consolidated statement of cash flows for the nine-month periods ending April 30, 2018 and 2017