On December 14, 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 2019 ending October 31, 2018 (Press release, Helix BioPharma, DEC 14, 2018, View Source [SID1234533058]).
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FINANCIAL REVIEW
The Company recorded a net loss and total comprehensive loss of $1,379,000 ($0.01 loss per common share) and $2,303,000 ($0.02 loss per common share) for the three-month periods ended October 31, 2018 and 2017, respectively. Due to Helix’s cash constraints, the Company has proactively had to manage its limited cash resources which has resulted in an overall reduction in spending and in turn delays to its clinical development programs.
Research and development
Research and development costs for the three-month periods ended October 31, 2018 and 2017 totalled $1,014,000 and $1,764,000, respectively.
L-DOS47 research and development expenses for the three-month periods ended October 31, 2018 and 2017 totalled $861,000 and $1,482,000, respectively. L-DOS47 research and development expenditures relate primarily to the Company’s LDOS002 European Phase I/II clinical study in Poland and the LDOS001 U.S. Phase I clinical study in the U.S in addition to some preliminary expenditures related to the Company’s LDOS003 Phase II clinical study in Poland and Ukraine. The lower LDOS47 spending is mainly the result of the winding down of the Company’s LDOS002 European Phase I/II clinical study in Poland. Given the limited cash resources, the Company had slowed down the previously committed LDOS003 clinical trial. The Company has recently advanced the funds to the CRO for the commencement of enrollment which is now underway. The Company continues to be committed to the LDOS001 study and has re-allocated resources to improve patient enrollment. The Company has begun early development of a Phase I/II study, L-DOS47 given in combination with doxorubicin, for the treatment of metastatic pancreatic cancer. An initial draft study protocol was circulated in July 2018 and ongoing development continues.
V-DOS47 research and development expenses for the three-month periods ended October 31, 2018 and 2017 totalled $130,000 and $113,000, 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 $135,000 and $83,000 in the three-month periods ended October 31, 2018 and 2017, respectively, from the PNCRD. The Company is looking at the possibility of selling its Polish subsidiary to raise capital in order to fund its L-DOS47 program and deal with its working capital deficiency.
Trademark and patent related expenses for the three-month periods ended October 31, 2018 and 2017 totalled $25,000 and $99,000, respectively. The Company previous had committed spend in order to adequately protect the Company’s intellectual property.
Operating, general and administration
Operating, general and administration expenses for the three-month periods ended October 31, 2018 and 2017 totalled $373,000 and $526,000, respectively. The decrease in operating, general and administration expenses mainly reflects ongoing cost cutting initiatives.
LIQUIDITY AND CAPITAL RESOURCES
The Company reported a consolidated net loss and total comprehensive loss of $1,379,000 for the three-month period ended October 31, 2018 (October 31, 2017 – $2,303,000). As at October 31, 2018 the Company had a working capital deficiency of $1,997,000, shareholders’ deficiency of $1,651,000 and a deficit of $165,384,000. As at July 31, 2018 the Company had a working capital deficiency of $1,901,000, shareholders’ deficiency of $1,527,000 and a deficit of $164,005,000.
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 gross proceeds of approximately $8,518,000 from private placement financings during fiscal 2018 and an additional $1,616,000 in the current quarter, the Company’s cash reserves of $871,000 as at October 31, 2018 in addition to the subsequent private placements the Company closed on October 30, 2018 for gross proceeds of approximately $871,000 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. The Company is looking at the possibility of selling its Polish subsidiary to raise capital in order to fund its L-DOS47 program and deal with its working capital deficiency.