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(TM) 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(R) 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(TM).
During the third quarter of 2009, the company began offering Helix
BioMedix-branded Striking(TM) products directly to consumers through its
new Striking(TM) 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(R) Pep 4-17;
-- Anticipated royalties from sales of Rodan + Fields'
SootheandEnhancements 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(TM), SmartPeptide(TM) and HB-AminoBright(TM) 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 -- 970,000
convertible debt offering
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 -- 970,000
deposits for convertible debt offering
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 496,856 211,069
payable, related party
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 25,654 25,654
outstanding at September 30, 2009, and
December 31, 2008
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 $ 2,800,021 $ 2,703,707
(deficit)
HELIX BIOMEDIX, INC.
CONDENSED STATEMENTS OF OPERATIONS
(Unaudited)
Three months ended September Nine months ended September 30,
30,
2009 2008 2009 2008
Revenue:
Licensing and
development $ 28,979 $ 56,859 $ 93,551 $ 263,251
fees
Peptide and
consumer 68,867 89,131 209,837 188,582
product sales
Administrative
services -- 10,549 20,196 32,321
revenue,
related party
Total revenue 97,846 156,539 323,584 484,154
Cost of
revenue:
Cost of
licensing and -- 30 -- 38,811
development
fees
Cost of
peptide and 52,751 88,062 174,332 163,531
consumer
product sales
Cost of
administrative
service -- 10,549 19,800 32,321
revenue,
related party
Total cost of 52,751 98,641 194,132 234,663
revenue
Gross profit 45,095 57,898 129,452 249,491
Operating
expenses:
Research and 159,752 173,638 559,444 567,053
development
Marketing and
business 132,234 91,625 368,268 295,353
development
General and 366,941 390,068 1,140,730 1,410,087
administrative
Accounting,
legal and 134,390 119,560 435,201 439,877
professional
fees
Depreciation
and 31,820 32,218 97,822 102,168
amortization
Total
operating 825,137 807,109 2,601,465 2,814,538
expenses
Loss from (780,042 ) (749,211 ) (2,472,013 ) (2,565,047 )
operations
Other income
(expense):
Interest 929 14,360 9,074 50,224
income
Interest
expense on (27,706 ) -- (69,191 ) --
convertible
notes payable
Interest
expense on
convertible (102,839 ) (57,863 ) (285,787 ) (151,561 )
notes payable,
related party
Accretion of
discount on (9,179 ) -- (22,915 ) --
convertible
notes payable
Accretion of
discount on
convertible (14,008 ) -- (35,152 ) (831,426 )
notes payable,
related party
Change in
value of
derivative -- -- -- 11,803
instruments,
including
related party
Unrealized
loss on -- -- -- (30,000 )
marketable
securities
Realized gain
on redemption -- 25,000 -- 25,000
of marketable
securities
Other income (152,803 ) (18,503 ) (403,971 ) (925,960 )
(expense), net
Net loss $ (932,845 ) $ (767,714 ) $ (2,875,984 ) $ (3,491,007 )
Basic and
diluted net $ (0.04 ) $ (0.03 ) $ (0.11 ) $ (0.14 )
loss per share
Weighted
average shares 25,653,512 25,653,512 25,653,512 25,653,512
outstanding
Source: Helix BioMedix, Inc.