Helix BioMedix Reports Third Quarter 2009 Financial Results
http://www.businesswire.com/news/home/20091106005087/en
BOTHELL, Wash.--(Business Wire)--
Helix BioMedix, Inc. (OTCBB: HXBM), a developer of bioactive peptides, today
announced financial results for the third quarter ended September 30, 2009.
Third quarter 2009 revenue was approximately $98,000 compared to revenue of
approximately $138,000 in the second quarter of 2009 and approximately $157,000
in the third quarter of 2008. Gross margins improved to 46.1% in the third
quarter 2009, compared to 37.0% in the same period a year ago, primarily due to
an increase in higher margin licensing and development fee revenue and a
reduction in administrative services revenue.
Net loss for the third quarter of 2009 was approximately $933,000, or ($0.04)
per share, compared to a net loss of approximately $1.02 million, or ($0.04) per
share, for the second quarter of 2009, and a net loss of approximately $768,000,
or ($0.03) per share, for the same period one year ago. The year-over-year
increase in net loss for the third quarter of 2009 was primarily attributable to
an increase of approximately $134,000 in non-operating expenses including those
associated with the company`s outstanding convertible notes payable, a decrease
in revenue, and an increase in marketing-related expenses.
"As a result of the weak global economy, several of our customers delayed their
product development activities during the quarter," stated R. Stephen Beatty,
President and Chief Executive Officer of Helix BioMedix. "However, customer
inquiries regarding the incorporation of the Helix BioMedix SmartPeptides
Technology into new formulations continued to increase. We anticipate that
several of these offerings will be launched in the coming months. We are also on
schedule to introduce a second Helix BioMedix-branded product line by year end."
Revenue for the third quarter of 2009 does not include royalties from any sales
of Rodan + Fields, LLC products or of Evonik`s TEGO Pep 4-17, which are reported
when estimable. Evonik has advised the company that they have initiated
aggressive sampling in the market and begun recording initial product sales. In
addition, during the first week of October, Rodan + Fields, LLC launched several
new products using Helix BioMedix technology in the Soothe and Enhancements
Mineral Peptides lines. Another partner, Grant Industries, has notified the
company of production of a mass market product by a leading specialty brand
ahead of a planned first quarter 2010 launch. This product incorporates Helix
BioMedix`s recently released peptide skin lightening complex, HB-Aminobright.
During the third quarter of 2009, the company began offering Helix
BioMedix-branded Striking products directly to consumers through its new
Striking Skin Care website, www.StrikingSkinCare.com. The company expects strong
sales growth from this product line during 2010. In addition, three clinical
studies detailing the efficacy and benefits of the individual products within
the Striking Skin Care line were recently completed and demonstrated positive
outcomes. These results have been submitted for peer review, and we anticipate
they will be published in early 2010.
During the third quarter of 2009, Helix BioMedix completed initial
proof-of-concept studies exploring the efficacy of company peptides in treating
Methicillin-resistant Staphylococcus aureus (MRSA) and other challenging
pathogens. The first product derived from this research is expected to be a
medical wound-care therapy. The company expects to seek approval of this product
using the 510(k) regulatory pathway and anticipates entering commercialization
in 2010.
Beatty continued, "We expect resumed revenue growth beginning in the first
quarter of 2010 based on:
* Anticipated royalties from sales of Evonik`s TEGO Pep 4-17;
* Anticipated royalties from sales of Rodan + Fields` Soothe and Enhancements
Mineral Peptides lines;
* Sales from the fourth quarter 2009 launch of our second proprietary product
line; and
* Increased web-based sales of our Striking Skin Care product line."
As of September 30, 2009, cash and cash equivalents were approximately $2.1
million compared to approximately $985,000 as of December 31, 2008. The increase
in cash and cash equivalents was due to approximately $3.5 million of gross
proceeds from the company`s issuance of convertible notes payable and warrants
in the first quarter of 2009, less cash used in operating activities during the
first nine months of 2009.
Beatty concluded, "This is an exciting time for Helix BioMedix. In spite of a
difficult economic environment, three of our partners are involved in new
product launches that include Helix BioMedix technology. In addition, we
launched the website for our SmartPeptide based Striking Skin Care product line
and are on schedule to launch our second product line during the fourth quarter
of 2009. Finally, we have successfully completed the initial studies required to
introduce our technology into the Rx market. Together, these efforts reflect the
potential of our multi-phased market strategy and for our proprietary peptides."
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. 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. The company takes
product development programs from theoretical concept to a 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. Striking, SmartPeptide and HB-AminoBright are trademarks
of Helix BioMedix, Inc. 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,and 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.
HELIX BIOMEDIX, INC.
CONDENSED BALANCE SHEETS
(Unaudited)
September 30, December 31,
2009 2008
ASSETS
Current assets:
Cash and cash equivalents $ 2,090,190 $ 984,844
Restricted cash - subscription deposits for convertible debt offering - 970,000
Accounts receivable, net 60,958 50,467
Inventory 196,927 111,411
Prepaid expenses and other current assets 47,057 104,706
Total current assets 2,395,132 2,221,428
Deposits 8,522 8,522
Property and equipment, net 97,586 120,154
Intangible assets, net 298,781 353,603
Total assets $ 2,800,021 $ 2,703,707
LIABILITIES AND STOCKHOLDERS` EQUITY (DEFICIT)
Current liabilities:
Accounts payable $ 126,287 $ 71,824
Accrued compensation and benefits 43,163 101,734
Accrued expenses 42,537 61,563
Deferred rent 370 2,039
Other current liabilities - subscription deposits for convertible debt offering - 970,000
Total current liabilities 212,357 1,207,160
Convertible notes payable 1,310,353 -
Convertible notes payable, related party 5,002,852 3,000,000
Accrued interest on convertible notes payable 69,191 -
Accrued interest on convertible notes payable, related party 496,856 211,069
Total liabilities 7,091,609 4,418,229
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 September 30, 2009, and December 31, 2008 25,654 25,654
Additional paid-in capital 30,641,167 30,342,249
Accumulated deficit (34,958,409 ) (32,082,425 )
Total stockholders` equity (deficit) (4,291,588 ) (1,714,522 )
Total liabilities and stockholders` equity (deficit) $ 2,800,021 $ 2,703,707
HELIX BIOMEDIX, INC.
CONDENSED STATEMENTS OF OPERATIONS
(Unaudited)
Three months ended September 30, Nine months ended September 30,
2009 2008 2009 2008
Revenue:
Licensing and development fees $ 28,979 $ 56,859 $ 93,551 $ 263,251
Peptide and consumer product sales 68,867 89,131 209,837 188,582
Administrative services revenue, related party - 10,549 20,196 32,321
Total revenue 97,846 156,539 323,584 484,154
Cost of revenue:
Cost of licensing and development fees - 30 - 38,811
Cost of peptide and consumer product sales 52,751 88,062 174,332 163,531
Cost of administrative service revenue, related party - 10,549 19,800 32,321
Total cost of revenue 52,751 98,641 194,132 234,663
Gross profit 45,095 57,898 129,452 249,491
Operating expenses:
Research and development 159,752 173,638 559,444 567,053
Marketing and business development 132,234 91,625 368,268 295,353
General and administrative 366,941 390,068 1,140,730 1,410,087
Accounting, legal and professional fees 134,390 119,560 435,201 439,877
Depreciation and amortization 31,820 32,218 97,822 102,168
Total operating expenses 825,137 807,109 2,601,465 2,814,538
Loss from operations (780,042 ) (749,211 ) (2,472,013 ) (2,565,047 )
Other income (expense):
Interest income 929 14,360 9,074 50,224
Interest expense on convertible notes payable (27,706 ) - (69,191 ) -
Interest expense on convertible notes payable, related party (102,839 ) (57,863 ) (285,787 ) (151,561 )
Accretion of discount on convertible notes payable (9,179 ) - (22,915 ) -
Accretion of discount on convertible notes payable, related party (14,008 ) - (35,152 ) (831,426 )
Change in value of derivative instruments, including related party - - - 11,803
Unrealized loss on marketable securities - - - (30,000 )
Realized gain on redemption of marketable securities - 25,000 - 25,000
Other income (expense), net (152,803 ) (18,503 ) (403,971 ) (925,960 )
Net loss $ (932,845 ) $ (767,714 ) $ (2,875,984 ) $ (3,491,007 )
Basic and diluted net loss per share $ (0.04 ) $ (0.03 ) $ (0.11 ) $ (0.14 )
Weighted average shares outstanding 25,653,512 25,653,512 25,653,512 25,653,512
Investor Contact:
Shelton Group Investor Relations
Matt Kreps, 972-239-5119 X 125
mkreps@sheltongroup.com
or
Company Contact:
Helix BioMedix
R. Stephen Beatty, 425-402-8400
President and CEO
sbeatty@helixbiomedix.com
Copyright Business Wire 2009
