Helix BioMedix Reports Second Quarter 2008 Financial Results

BOTHELL, Wash.--(Business Wire)--
Helix BioMedix, Inc. (OTCBB: HXBM), a developer of bioactive
peptides, today announced financial results for the second quarter
ended June 30, 2008.

For the second quarter of 2008, the company reported revenue of
approximately $87,000, compared to revenue of approximately $141,000
in the same period one year ago. Net loss for the second quarter of
2008 was approximately $1,448,000, or $(0.06) per share, compared to a
net loss of approximately $831,000, or ($0.03) per share, in the same
period one year ago. The increase in net loss was primarily
attributable to approximately $63,000 of interest expense and
approximately $546,000 of discount accretion associated with the
convertible note payable issued in February, partially offset by a
gain of approximately $153,000 in the fair value of derivative
instruments.

As of June 30, 2008, the company had cash and cash equivalents of
approximately $2,375,000, compared to approximately $3,165,000 as of
March 31, 2008. Current and non-current marketable securities were
approximately $188,000 as of June 30, 2008, compared to approximately
$170,000 as of March 31, 2008.

"Revenue for the second quarter was slightly higher than our
internal projections and we remain on track with our plan to generate
more than $1.0 million in revenue for the year," stated R. Stephen
Beatty, President and Chief Executive Officer of Helix BioMedix.
"During the quarter, we continued to focus on our 2008 strategic
objectives, which are designed to accelerate the wide distribution of
our peptides to numerous markets through a variety of channels. First,
our strategic partner, Dermaventures, has expanded their marketing
efforts surrounding the P.A.C Perfect(TM) product line to include
radio and print advertising in addition to their original infomercial
strategy. Initial results have been encouraging and sales are expected
to increase throughout the remainder of the year."

Beatty continued, "We also continue to make progress with
Striking(TM), our prestige anti-aging skin care line. We remain on
schedule for the initial rollout of three to four products this year,
followed by the release of eight to nine additional products in 2009.
In addition, we continue to benefit from our relationships with our
licensing partners as evidenced by the growing number of products
available on the market containing our peptides. Our licensing
partner, Evonik, plans to make a presentation on Helix BioMedix's
peptide innovation at an upcoming industry conference in Barcelona,
Spain, providing our proprietary peptides with significant exposure to
industry decision and opinion makers. Currently, there are more than
thirty products in the market containing our peptides, up from
twenty-five last quarter, many of which are sold through significant
regional and national retailers such as Walgreens, Rite Aid, Whole
Foods, GNC, Nordstrom, ShopNBC, Sephora, Target and the Home Shopping
Network, among others."

Beatty concluded, "Finally, we remain focused on moving our
lipohexapeptide program into clinical trials and are continuing our
efforts to secure a partner or the capital required to fund the
program. We have recently had some very productive discussions and I
am pleased with our progress despite the current economic conditions,
which have limited access to capital across a multitude of industries.
The ultimate success of our pharmaceutical program remains the
company's top priority, and we continue to believe that it will serve
as the catalyst for exponential growth in the future."

About Helix BioMedix, Inc.

Helix BioMedix, Inc. is a biopharmaceutical company with an
extensive library of diverse bioactive peptides and patents covering
six distinct classes and hundreds of thousands of peptide sequences.
Our mission is to enrich clinical practice and the patient/consumer
experience by developing topically-applied products which offer the
health, beauty and safety benefits of our advanced bioactive small
molecule technology. Our vision is to be recognized as the world
leader in the identification, qualification and commercialization of
natural and synthetic peptides.

Our core competencies include peptide design, synthesis and
characterization together with assay development, screening, tissue
culture and microbiology, leveraged through relationships with
contract research organizations and peptide manufacturers. We have the
capability to take our product development programs from theoretical
concept to a validated and qualified skin care active ingredient fully
validated as to efficacy and safety. Applications for Helix BioMedix
peptides include anti-aging cosmeceutical skin care and acne treatment
as well as other topical anti-infective pharmaceuticals and wound
healing applications. In addition, we are developing finished,
peptide-based products to market with our partners.

More information about the company and its proprietary peptides
may be found on the company's website at www.helixbiomedix.com.

Forward Looking Statements

This press release contains forward-looking statements (statements
which are not historical facts) within the meaning of the Private
Securities Litigation Reform Act of 1995. These forward-looking
statements include statements regarding activities, events or
developments that the company expects, believes or anticipates may
occur in the future, including statements related to its potential
growth, product development and commercialization and revenue. A
number of factors could cause actual results to differ from those
indicated in the forward-looking statements, including the company's
ability to successfully raise additional capital, enter into revenue
generating license agreements, continue its research and development
efforts, including pre-clinical and clinical studies, continue
developing marketable peptide-based products and general economic
conditions. Additional assumptions, risks and uncertainties are
described in detail in the company's reports and other filings with
the Securities and Exchange Commission. Such filings are available on
the company's website or at www.sec.gov. Readers are cautioned that
such forward-looking statements are not guarantees of future
performance and that actual results or developments may differ
materially from those set forth in the forward-looking statements. The
company undertakes no obligation to publicly update or revise
forward-looking statements to reflect subsequent events or
circumstances.

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HELIX BIOMEDIX, INC.
CONDENSED BALANCE SHEETS
(Unaudited)

June 30, December 31,
2008 2007
-------------- --------------
ASSETS
Current assets:
Cash and cash equivalents $ 2,375,403 $ 461,290
Marketable securities, current 50,000 700,000
Accounts receivable, net 40,559 83,915
Inventory 77,566 65,279
Prepaid expenses and other current
assets 101,315 144,074
-------------- --------------
Total current assets 2,644,843 1,454,558

Marketable securities, non-current 137,550 -
Deposits 8,522 8,522
Property and equipment, net 122,663 126,509
Intangible assets, net 393,043 432,482
-------------- --------------
Total assets $ 3,306,621 $ 2,022,071
============== ==============

LIABILITIES AND STOCKHOLDERS' EQUITY
(DEFICIT)

Current liabilities:
Accounts payable $ 107,479 $ 95,071
Accrued compensation and benefits 159,129 63,813
Accrued expenses 42,045 60,269
Deferred revenue - 130,000
-------------- --------------
Total current liabilities 308,653 349,153

Deferred rent 2,216 2,205
Convertible note payable, related party 3,000,000 -
Accrued interest on convertible note
payable, related party 92,712 -
-------------- --------------
Total liabilities 3,403,581 351,358

Commitments and contingencies

Stockholders' equity (deficit):
Preferred stock, $0.001 par value,
25,000,000 shares authorized; no
shares issued or outstanding - -
Common stock, $0.001 par value,
100,000,000 shares authorized;
25,653,512 shares outstanding at June
30, 2008, and December 31, 2007 25,654 25,654

Additional paid-in capital 30,150,042 29,211,972
Accumulated deficit (30,290,206) (27,566,913)
Accumulated other comprehensive income
(loss) 17,550 -
-------------- --------------
Total stockholders' equity
(deficit) (96,960) 1,670,713
-------------- --------------
Total liabilities and
stockholders' equity (deficit) $ 3,306,621 $ 2,022,071
============== ==============
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HELIX BIOMEDIX, INC.
CONDENSED STATEMENTS OF OPERATIONS
(Unaudited)

Three months ended Six months ended
June 30, June 30,
------------------------- -------------------------
2008 2007 2008 2007
------------ ------------ ------------ ------------
Revenue:
Licensing and
development
fees $ 59,330 $ 16,747 $ 206,392 $ 46,241
Peptide sales 6,143 59,507 99,451 88,435
Peptide sales,
related party - 64,400 - 64,400
Administrative
services
revenue,
related party 21,772 - 21,772 -
------------ ------------ ------------ ------------
Total
revenue 87,245 140,654 327,615 199,076

Operating
expenses:
Cost of peptide
sales 6,085 10,421 75,469 10,421
Cost of
administrative
services
revenue,
related party 21,772 - 21,772 -
Other cost of
revenue - - 38,781 -
Research and
development 198,238 202,458 393,415 407,955
Marketing and
business
development 89,041 105,123 203,728 209,334
General and
administrative 586,650 502,004 1,020,019 892,711
Accounting,
legal and
professional
fees 159,502 133,746 320,317 282,223
Depreciation
and
amortization 34,901 43,542 69,950 87,964
------------ ------------ ------------ ------------
Total
operating
expenses 1,096,189 997,294 2,143,451 1,890,608
------------ ------------ ------------ ------------
Loss from
operations (1,008,944) (856,640) (1,815,836) (1,691,532)

Other income
(expense):
Interest income 17,074 25,478 35,864 47,881
Interest
expense on
convertible
note payable,
related party (63,120) - (93,698) -
Accretion of
discount on
convertible
note payable,
related party (546,011) - (831,426) -
Change in value
of derivative
instruments,
including
related party 152,706 - 11,803 -
Unrealized loss
on marketable
securities - - (30,000) -
------------ ------------ ------------ ------------
Other income
(expense),
net (439,351) 25,478 (907,457) 47,881

Net loss $(1,448,295) $ (831,162) $(2,723,293) $(1,643,651)
============ ============ ============ ============

Basic and diluted
net loss per
share $ (0.06) $ (0.03) $ (0.11) $ (0.07)
============ ============ ============ ============

Weighted average
shares
outstanding 25,653,512 25,653,512 25,653,512 24,617,463
============ ============ ============ ============
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Investor Contact:
Shelton Group Investor Relations
Ryan Bright, 972-239-5119 X 159
rbright@sheltongroup.com
or
Company Contact:
Helix BioMedix, Inc.
R. Stephen Beatty, 425-402-8400
President and CEO
sbeatty@helixbiomedix.com

Copyright Business Wire 2008