HXBM Helix Biomedix Inc (PK)

Helix BioMedix, Inc. (OTCQB: HXBM), a developer of bioactive peptides, today announced financial results for the company’s second quarter ended June 30, 2011.

Second Quarter 2011 Highlights

• Total revenue increased 110% to approximately $693,000 compared to approximately $330,000 in the same period in 2010 and grew 94% over the approximately $358,000 in the first quarter of 2011.
• Revenue in the first half of 2011 increased 163% to approximately $1.05 million compared to approximately $400,000 in the first six months of 2010.
• Consumer product sales to NuGlow Cosmaceuticals, LLC (NuGlow), a related party, increased to approximately $188,000 from $51,000 last quarter. Deferred product sales to NuGlow were approximately $178,000.
• Net loss decreased to approximately $625,000, compared to approximately $710,000 in the first quarter of 2011 and $942,000 in the same period in 2010.

Second Quarter 2011 Results

Revenue for the second quarter of 2011 was approximately $693,000, compared to approximately $358,000 in the first quarter of 2011 and $330,000 in the second quarter of 2010. Revenue increased to approximately $1.05 million through the first six months of 2011 compared to approximately $400,000 in the first six months of 2010. The year-over-year revenue growth reflected a significant increase in peptide and consumer product sales, including consumer product sales to NuGlow under the company’s July 2010 supply agreement.

For the second quarter of 2011, deferred gross profit derived from sales to NuGlow was approximately $87,000, generated from approximately $178,000 in deferred revenue, which will be recognized by Helix BioMedix when NuGlow delivers the associated products to its third-party customers.

Commenting on the results, R. Stephen Beatty, President and Chief Executive Officer of Helix BioMedix, stated, “I am very pleased that we have achieved yet another record quarter for Helix BioMedix. Our revenue in the first half of 2011 is over 20 percent higher than our revenue for all of 2010. This significant growth demonstrates the strength of our consumer product focused strategy, in particular with our partners such as NuGlow. We look forward to continued strong results throughout the rest of the year.”

Gross margin for the second quarter of 2011 was 49%, compared to 66% in the first quarter of 2011 and 62% in the second quarter of 2010. The decrease in gross margin reflected the larger revenue contribution from peptide and consumer products sales as compared to license revenue, which typically has a higher gross margin.

Licensing fees declined slightly to approximately $165,000 in the second quarter of 2011 as compared to approximately $169,000 in the same period in 2010. For the first six months of 2011, licensing fees were approximately $336,000 compared to $205,500 in the same period in 2010, representing an increase of 64%. Peptide and consumer product sales increased significantly to approximately $340,000 in the second quarter of 2011 compared to $161,000 in the second quarter of 2010. The company also recorded approximately $188,000 in consumer product sales to NuGlow during the second quarter of 2011 compared to approximately $51,000 in the first quarter of 2011.

Net loss for the second quarter of 2011 was approximately $625,000, or $(0.01) per share, compared to a net loss of approximately $710,000, or $(0.01) per share, in the first quarter of 2011 and a net loss of approximately $942,000, or $(0.04) per share, in the second quarter of 2010. The decrease in net loss for the second quarter of 2011 compared to the same period in 2010 was due to improved revenue, lower operating expenses and a reduction in interest expenses resulting from the amendment and conversion of previously outstanding convertible notes payable in the fourth quarter of 2010.

As of June 30, 2011, cash and cash equivalents were approximately $2.7 million, a decrease from approximately $4.0 million at December 31, 2010, due primarily to cash used in operations during the first six months of 2011.

Beatty concluded, “Based on the success of our consumer product focused strategies in the first half of 2011, we believe our momentum will deliver further year-over-year revenue growth in the second half of 2011. We continue to focus on the sales and marketing of our peptides and consumer products as well as expanding the relationships with our long-term customers and partners.”

About Helix BioMedix, Inc.

Helix BioMedix, Inc. is a biopharmaceutical company with an extensive library of structurally diverse bioactive peptides and patents covering 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®, Cerakine™, Apothederm™ and SmartPeptide™ 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

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      June 30,2011 December 31,2010 ASSETS Current assets: Cash and cash equivalents $ 2,660,333 $ 4,044,309 Accounts receivable, net 366,348 235,149 Accounts receivable, related party, net 157,353 52,795 Inventory 305,839 278,392 Prepaid expenses and other current assets   115,812     63,471   Total current assets 3,605,685 4,674,116 Property and equipment, net 46,623 44,178 Intangible assets, net 180,183 214,068 Other long term assets 11,743 29,179 Investment in affiliated company   215,868     266,941   Total assets $ 4,060,102   $ 5,228,482     LIABILITIES AND STOCKHOLDERS’ EQUITY

 

Current liabilities: Accounts payable $ 191,748 $ 130,489 Accrued compensation and benefits 36,404 30,285 Accrued expenses 48,321 102,123 Deferred gross profit, related party 86,510 50,479 Deferred rent, current   5,419     4,847   Total current liabilities 368,402 318,223 Deferred rent, non-current   32,916     35,815   Total liabilities 401,318 354,038 Commitments and contingencies Stockholders’ equity: 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; 49,720,255 shares outstanding at June 30, 2011, and December 31, 2010 49,721 49,721 Additional paid-in capital 48,511,934 48,392,985 Accumulated deficit   (44,902,871 )   (43,568,262 ) Total stockholders’ equity   3,658,784     4,874,444   Total liabilities and stockholders’ equity $ 4,060,102   $ 5,228,482     HELIX BIOMEDIX, INC. CONDENSED STATEMENTS OF OPERATIONS

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    Three months ended June 30,       Six months ended June 30, 2011     2010 2011     2010 Revenue: Licensing fees $ 164,975 $ 168,960 $ 336,400 $ 205,518 Peptide and consumer product sales 340,349 161,438 475,281 194,598 Consumer product sales, related party   187,779     —     239,050     —   Total revenue   693,103     330,398     1,050,731     400,116   Cost of revenue: Cost of peptide and consumer product sales 247,698 124,745 338,995 149,234 Cost of consumer product sales, related party   104,995     —     134,525     —   Total cost of revenue   352,693     124,745     473,520     149,234   Gross profit 340,410 205,653 577,211 250,882 Operating expenses: Research and development 90,747 208,193 315,910 375,865 Marketing and business development 244,018 160,751 448,455 286,989 General and administrative 374,889 347,115 716,681 706,860 Accounting, legal and professional fees 144,196 185,168 309,633 306,775 Depreciation and amortization   28,147     29,291     54,764     58,373   Total operating expenses   881,997     930,518     1,845,443     1,734,862   Loss from operations   (541,587 )   (724,865 )   (1,268,232 )   (1,483,980 ) Other income (expense): Interest income 928 1,014 2,132 1,359 Interest expense on convertible notes payable — (35,745 ) — (64,273 ) Interest expense on convertible notes payable, related party — (154,575 ) — (270,279 ) Accretion of discount on convertible notes payable — (10,089 ) — (19,186 ) Accretion of discount on convertible notes payable, related party — (18,227 ) — (33,177 ) Equity in loss of affiliated company (59,065 ) — (51,073 ) — Change in fair value of option to purchase interest in affiliated company   (25,151 )   —     (17,436 )   —   Total other income (expense), net   (83,288 )   (217,622 )   (66,377 )   (385,556 ) Net loss and comprehensive loss $ (624,875 ) $ (942,487 ) $ (1,334,609 ) $ (1,869,536 ) Basic and diluted net loss per share $ (0.01 ) $ (0.04 ) $ (0.03 ) $ (0.07 ) Weighted average shares outstanding   49,720,255     25,653,512     49,720,255     25,653,512