Helix BioMedix Reports Third Quarter 2008 Financial Results

Nov 06, 2008 - Bothell, Washington

Helix BioMedix, Inc. (HXBM.OB), a developer of bioactive peptides, today announced financial results for the third quarter ended September 30, 2008.

For the third quarter of 2008, the company reported revenue of approximately $157,000, compared to revenue of approximately $87,000 in the second quarter of 2008 and $159,000 in the third quarter of 2007. Net loss for the third quarter of 2008 was approximately $768,000, or ($0.03) per share, compared to net losses of approximately $1.4 million, or ($0.06), per share in the prior quarter and $900,000, or ($0.04) per share, in the same period one year ago. The improvement in the net loss for the third quarter of 2008 compared to the same period in 2007 was primarily attributable to a reduction in operating expenses of approximately $178,000 and $25,000 realized gain on redemption of marketable securities, which were partially offset by approximately $58,000 in interest expense associated with the $3.0 million convertible debt issued on February 14, 2008 and amended on June 27, 2008.

As of September 30, 2008, cash and cash equivalents totaled approximately $1.7 million, compared to approximately $2.4 million at June 30, 2008 and $461,000 at December 31, 2007. Marketable securities were $50,000 at September 30, 2008, compared to $187,550 at June 30, 2008 and $700,000 at December 31, 2007. During the third quarter of 2008, the company also received an aggregate of $735,000 of subscription deposits associated with the company’s pending unsecured convertible debt offering, which was reflected as restricted cash and other current liabilities on the company’s balance sheet at September 30, 2008.

“Our third quarter revenue increased compared to the second quarter, primarily due to an increase in the sale of peptides as we continue our efforts to commercialize our innovative bioactive peptides through a number of sales channels and distribution opportunities,” stated R. Stephen Beatty, President and Chief Executive Officer of Helix BioMedix. “Looking at the first nine months of 2008, we are on pace to achieve record annual revenue and have generated more revenue in the first nine months of 2008 than we did for all of 2007. However, the current difficult macro-economic environment will be a contributing factor to missing the revenue potentials we had seen earlier in the year and as recently as last quarter for both the remainder of 2008 and into 2009.”

Beatty continued, “In terms of our business achievements, we have continued to make significant progress related to our three strategic objectives for 2008. Most notably, we remain on track to launch our first proprietary branded products prior to the end of the year. Our StrikingTM line will include the exclusive Helix BioMedix SmartPeptide™ Heptapeptide-7 that helps promote keratinocyte proliferation and migration to lessen the appearance of fine lines and wrinkles. The StrikingTM line will initially include four products with distribution through several national catalog companies, and we expect to introduce additional products next year. Our second objective was to generate more revenue through our license agreements this year than last and we have accomplished that goal. Further, our licensee Goldschmidt GmbH (Evonik) launched their first Helix BioMedix peptide under the trade name Tego®Pep 4-17 at the International Federation of Societies of Cosmetic Chemists (IFSCC) Congress in October. Evonik is developing additional Helix BioMedix peptides through their own research and in collaboration with leading universities. There are now over 35 products containing Helix BioMedix peptides available in the market through a large number of national and regional retail outlets including Walgreens, Rite Aid, Whole Foods, GNC, Nordstrom, ShopNBC, Sephora, Target and the Home Shopping Network, among others. We also continue to pursue additional licensing agreements such as the agreement we reached in September of this year with Rodan & Fields, LLC for our new patent pending PIP3™ technology for proprietary formulations to be included in their regimen-based skincare line with initial products expected in early 2009. In addition, our partnership with DermaVentures, LLC continues to progress, and the P.A.C. Perfect™ line is being presented in a new test offer in the Spanish language television market, which will focus on customer long-term continuity measurements.”

Beatty concluded, “Finally, we continue to aggressively pursue the funding required to move our Lipohexapeptide program into clinical trials in the most effective manner possible, while protecting the best interest of our stockholders and achieving our overall corporate goals. We are speaking with a number of interested parties and continue to believe that this program represents the long-term future of the company and are intently focused on achieving our goals to return significant value to our stockholders.”

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. Striking is a trademark of Helix BioMedix, Inc.; P.A.C Perfect is a trademark of DermaVentures, LLC; and Tego is a registered trademark of Goldschmidt GmbH.

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

HELIX BIOMEDIX, INC.
CONDENSED BALANCE SHEETS
(Unaudited)

,

		September 30, 2008		December 31, 2007
ASSETS
Current assets:
Cash and cash equivalents		$ 1,728,225		$ 461,290
Restricted cash – subscription deposits for convertible debt offering		735,000		-
Marketable securities, current		50,000		700,000
Accounts receivable, net		108,829		83,915
Inventory		81,589		65,279
Prepaid expenses and other current assets		99,925		144,074
Total current assets		2,803,568		1,454,558
Deposits		8,522		8,522
Property and equipment, net		110,166		126,509
Intangible assets, net		373,322		432,482
Total assets		$ 3,295,578		$ 2,022,071
LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT)
Current liabilities:
Accounts payable		$ 139,673		$ 95,071
Accrued compensation and benefits		95,014		63,813
Accrued expenses		28,718		60,269
Deferred revenue		-		130,000
Other current liabilities – subscription deposits for convertible debt offering		735,000		-
Total current liabilities		998,405		349,153
Deferred rent		2,221		2,205
Convertible note payable, related party		3,000,000		-
Accrued interest on convertible note payable, related party		150,575		-
Total liabilities		4,151,201		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 September 30, 2008, and December 31, 2007		25,654		25,654
Additional paid-in capital		30,171,643		29,211,972
Accumulated deficit		(31,057,920)		(27,566,913)
Accumulated other comprehensive income		5,000		-
Total stockholders’ equity (deficit)		(855,623)		1,670,713
Total liabilities and stockholders’ equity (deficit)		$ 3,295,578		$ 2,022,071

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