Helix BioMedix Reports First Quarter 2008 Financial Results

Reports Record Revenue

Continues to Execute on Strategic Goals and Objectives

May 16, 2008 - Bothell, Washington

Helix BioMedix, Inc. (HXBM.OB), a developer of bioactive peptides, today announced financial results for the first quarter ended March 31, 2008.

For the first quarter of 2008, the company reported record revenue of approximately $240,000, compared to revenue of approximately $58,000 in the same period one year ago. Net loss for the first quarter of 2008 was approximately $1,275,000, or $(0.05) per share, compared to a net loss of approximately $812,000, or ($0.03) per share, in the same period one year ago. The increase in the net loss was primarily attributable to approximately $316,000 of interest expense and discount accretion associated with a convertible debt financing in the amount of $3 million which closed on February 14, 2008. Also included in the net loss was approximately $141,000 of changes in fair value of derivative instruments and $30,000 of unrealized loss on marketable securities.

As of March 31, 2008, the company’s cash and cash equivalents was $3,165,000 compared to $462,000 as of December 31, 2007. The increase in cash was associated with the $3 million convertible debt financing. Current and non-current marketable securities were $170,000 as of March 31, 2008 compared to $700,000 as of December 31, 2007.

“Our revenue for the first quarter more than doubled the revenue we recorded in the fourth quarter of 2007 and serves as evidence of the progress we have made in our efforts to commercialize our innovative bioactive peptides,” stated R. Stephen Beatty, President and Chief Executive Officer of Helix BioMedix. “During the quarter, we continued to execute on our business goals and objectives, including the February close of a $3 million funding agreement that provides us with the necessary capital to support our operations throughout the remainder of the year. In addition, we also expanded our intellectual property portfolio through the recently announced issuance of a patent covering more than eighty of our proprietary peptides for use in cosmetic and skin care applications.”

Beatty continued, “We have also made significant progress on our 2008 strategic initiatives. First, our anti-aging product line remains on schedule for launch in the second half of 2008. Our plan calls for the initial rollout of three to four products this year, followed by the release of eight to nine additional products in 2009. We also continue to make progress with our strategic partner, DermaVentures. DermaVentures’ P.A.C. Perfect product line is currently shipping to customers and sales are expected to continue to increase throughout the remainder of the year. Next, as evidenced by our results in the first quarter, we have begun to generate significantly more revenue from our licensing partnerships. There are currently more than twenty-five products available in the market containing our peptides, and we expect that number to continue to grow throughout 2008.”

Beatty concluded, “Finally, we are continuing our efforts to secure the funding required to move our lipohexapeptide program into clinical trials and have had a number of productive discussions with both industry and financial partners. As we have stated in the past, we believe that the clinical program represents a significant long-term opportunity for the company and our shareholders. As such, we are intently focused on initiating clinical development of our acne program before the end of the year.”

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.

Contacts:
Helix BioMedix, Inc.
R. Stephen Beatty, President and CEO
425-402-8400
sbeatty@helixbiomedix.com
or:

Investor Relations:
Shelton Group
Ryan Bright
972-239-5119, ext. 159
rbright@sheltongroup.com

HELIX BIOMEDIX, INC.
CONDENSED BALANCE SHEETS
(Unaudited)

		March 31, 2008		December 31, 2007
ASSETS
Current assets:
Cash and cash equivalents		$ 3,164,994		$ 461,290
Marketable securities, current		-		700,000
Accounts receivable, net		102,091		83,915
Inventory		50,513		65,279
Prepaid expenses and other current assets		138,130		144,074
Total current assets		3,455,728		1,454,558
Marketable securities, non-current		170,000		-
Deposits		8,522		8,522
Property and equipment, net		118,257		126,509
Intangible assets, net		412,763		432,482
Total assets		$ 4,165,270		$ 2,022,071
LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT)
Current liabilities:
Accounts payable		$ 96,724		$ 95,071
Accrued compensation and benefits		84,562		63,813
Accrued expenses		78,894		60,269
Deferred revenue		-		130,000
Derivative liabilities, including related party		1,514,225		-
Total current liabilities		1,774,405		349,153
Deferred rent		2,211		2,205
Convertible note payable, related party, less unamortized discount of $558,420		3,191,580		-
Accrued interest on convertible note payable, related party		30,247		-
Total liabilities		4,998,443		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 March 31, 2008, and December 31, 2007		25,654		25,654
Additional paid-in capital/p>		27,983,084		29,211,972
Accumulated deficit		(28,841,911)		(27,566,913)
Total stockholders’ equity (deficit)		(833,173)		1,670,713
Total liabilities and stockholders’ equity (deficit)		$ 4,165,270		$ 2,022,071

HELIX BIOMEDIX, INC.
CONDENSED STATEMENTS OF OPERATIONS
(Unaudited)

		Three months ended March 31,
		2008		2007
Revenue:
Licensing and development fees		$ 147,062		$ 29,494
Peptide sales		93,308		28,928
Total revenue		240,370		58,422
Operating expenses:
Cost of peptide sales		69,384		-
Other cost of revenue		38,781		-
Research and development		195,177		205,497
Marketing and business development		114,687		104,211
General and administrative		433,369		390,707
Accounting, legal and professional fees		160,815		148,477
Depreciation and amortization		35,049		44,422
Total operating expenses		1,047,262		893,314
Loss from operations		(806,892)		(834,892)
Other income (expense):
Interest income		18,790		22,403
Interest expense on convertible note payable, related party		(30,578)		-
Accretion of discount on convertible note payable, related party, net		(285,415)		-
Change in value of derivative instruments, including related party, net		(140,903)		-
Unrealized loss on marketable securities		(30,000)		-
Other income (expense), net		(468,106)		22,403
Net loss		$(1,274,998)		$(812,4897)
Basic and diluted net loss per share		$ (0.05)		$ (0.03)
Weighted average shares outstanding		25,653,512		23,569,902