On October 26, 2018 Helix BioPharma Corp. (TSX, FSE: "HBP"), an immuno-oncology company developing drug candidates for the prevention and treatment of cancer, reported its financial results for the year ended July 31, 2018 (Press release, Helix BioPharma, OCT 26, 2018, View Source content/uploads/2018/10/20181026-HBP-Press-Release-Announces-Fiscal-2018-Results-FINAL.pdf [SID1234530410]).
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FINANCIAL REVIEW
The Company recorded a net loss and total comprehensive loss of $8,625,000 and $10,059,000 (a loss per common
share of $0.09 and $0.11) for the fiscal years ended July 31, 2018 and 2017 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.
L-DOS47 research and development expenses for fiscal 2018 totalled $4,893,000 (2017 – $5,496,000). L-DOS47
research and development expenditures relate primarily to the Company’s LDOS002 European Phase I/II clinical
study in Poland, LDOS001 Phase I clinical study in the U.S., and preliminary expenditures related to the Company’s
LDOS003 Phase II clinical study in
clinical study report. In addition, given the limited cash resources, the LDOS003 clinical trial which was previously
planned to commence enrolment in early 2018 had not moved forward though the Company is still committed to
advance the program. The Company continues to be committed to the LDOS001 study and has re-allocated
resources to improve patient enrollment. An amendment to the LDOS001 study protocol allowed the Company to
advance enrollment from Cohort two at the beginning of the 2018 fiscal year to where it was most recently announced that the Company commenced enrolment in the final two cohorts of the study which is now enrolling patients in Cohort six. In addition, 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 fiscal 2018 totalled $457,000 (2017 – $372,000). The higher
expenditures in the current year mainly reflect the increase in staff and consultants as the Polish subsidiary ramped
up activities in the program. In fiscal 2016 the Company established a wholly-owned subsidiary in Poland and entered
into 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 $475,000
and $335,000 in fiscal 2018 and 2017, respectively, from the PNCRD.
CAR-T research and development expenses for fiscal 2018 and 2017 totalled $318,000 (2017 – $259,000). During
the current fiscal year, the Company announced a collaboration agreement related to novel CAR-T therapeutics and
new antibody-based technologies for cell-based therapies.
Corporate research and development expenses were relatively flat for fiscal 2018 and 2017 and totalled $432,000
(2017 – $474,000). Trademark and patent related expenses for fiscal 2018 and 2017 totalled $440,000 (2017 – $361,000). The Company continues to ensure it works to adequately protect its intellectual property.
Operating, general and administration
Operating, general and administration expenses totalled $2,462,000 and $3,738,000, respectively for the fiscal years
ended July 31, 2018 and 2016. The decrease in operating, general and administration expenses reflects the
Company’s cost cutting initiatives. The Company eliminated the employment/contractual arrangement with its then
CEO, who was also a director of the Company, and also let go if it’s controller as part of a headcount reduction plan.
Aggressive steps were also taken to reduce unnecessary expenditures such as travel and conferences. In addition,
various third-party contracts were also eliminated. During the fiscal year the Company hired Deloitte as strategic
advisor to explore partnering and licensing opportunities. Cost reductions in Canada were offset by operating, general and administrative expenditure increases incurred at the Company’s Polish subsidiary.
LIQUIDITY AND CAPITAL RESOURCES
As at July 31, 2018 the Company had a working capital deficiency of $1,901,000 (2017 – $504,000), shareholders’
deficiency of $1,527,000 (2017 – $17,000) and a deficit of $164,005,000 (2017 – $155,380,000).
The Company’s cash reserves of $366,000, as at July 31, 2018 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
research and development initiatives through to completion. Subsequent to the Company’s fiscal year ending July
31, 2018, the Company closed two additional private placements for gross proceeds of $1,274,000. Though the
funds raised have assisted the Company in dealing with the working capital deficiency, additional funds are required
to advance the various clinical and preclinical programs and pay for the Company’s overhead costs. 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 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.