HXBM Helix Biomedix Inc (PK)

Helix BioMedix, Inc. (OTCQB: HXBM), a developer of bioactive peptides, today announced financial results for the company’s first quarter ended March 31, 2011.

First Quarter 2011 Highlights

• Total revenue increased 413% to approximately $358,000, compared to approximately $70,000 in the same period in 2010 and approximately $358,000 in the fourth quarter of 2010.
• License fee revenue grew 369% and peptide and consumer product sales grew 307% compared to the prior year first quarter, reflecting the continued increasing use of Helix BioMedix peptides by customers.
• Consumer product sales to NuGlow Cosmaceuticals, LLC (NuGlow) were $51,000; deferred product sales to NuGlow increased to approximately $192,000 on the growth of NuGlow product sales.
• Net loss decreased to approximately $710,000, compared to a net loss of approximately $927,000 in the same period in 2010.

First Quarter 2011 Results

Revenue for the first quarter of 2011 was approximately $358,000, comparable to the level achieved in the fourth quarter of 2010 and representing a 413% increase over the approximately $70,000 reported revenue in the first quarter of 2010. The year-over-year revenue growth reflects a significant increase in licensing fees and improved peptide and consumer product sales.

At March 31, 2011, deferred gross profit derived from NuGlow, a related party, was approximately $87,000, generated from approximately $192,000 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, “The first quarter results reflect the successful implementation of our strategic plan to focus on commercialization of our portfolio. This sets the stage for continued success in 2011 as we further the implementation of our product plans.”

Gross margin for the first quarter of 2011 was 66%, compared to 65% in the first quarter of 2010, reflecting primarily a larger contribution of higher margin license revenue combined with improved margin from peptide sales.

Licensing fees in the first quarter of 2011 were approximately $171,000, compared to approximately $37,000 for the same period in 2010. First quarter 2011 license revenue reflected the conversion of a key customer from bi-annual to quarterly royalty reporting, which will contribute to more consistent revenue recognition. Peptide and consumer product sales in the first quarter of 2011, including sales to NuGlow of approximately $51,000, increased to approximately $186,000, compared to approximately $33,000 for the same period last year when there were no related-party sales.

Net loss for the first quarter of 2011 was approximately $710,000, or $(0.01) per share, compared to a net loss of approximately $927,000, or $(0.04) per share, in the first quarter of 2010. The decrease in net loss per share for the first quarter of 2011 was, in part, attributable to an increase in the weighted average number of shares of common stock outstanding resulting from the amendment, conversion, and exercise of previously outstanding convertible notes payable and warrants and the consummation of an equity financing in the fourth quarter of 2010.

As of March 31, 2011, cash and cash equivalents were approximately $3.3 million, a decrease from approximately $4.0 million at December 31, 2010, due primarily to cash used in operations during the first quarter of 2011.

Beatty concluded, “We are enthusiastic about our outlook for 2011. Based on the strong first quarter results and increasing demand for our products, we anticipate continued growth in the year ahead from our skin care line, existing customer relationships and partnership with NuGlow. In response, we are furthering the development of new applications and increasing our sales and marketing efforts ahead of new product introductions. We look forward to reporting our progress with respect to the success of these initiatives.”

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

(Unaudited)

      March 31,2011 December 31,2010 ASSETS Current assets: Cash and cash equivalents $ 3,270,776 $ 4,044,309 Accounts receivable, net 276,121 235,149 Accounts receivable, related party, net 124,603 52,795 Inventory 298,706 278,392 Prepaid expenses and other current assets   128,133     63,471   Total current assets 4,098,339 4,674,116 Property and equipment, net 55,159 44,178 Intangible assets, net 197,125 214,068 Other long term assets 36,894 29,179 Investment in affiliated company   274,933     266,941   Total assets $ 4,662,450   $ 5,228,482   LIABILITIES AND STOCKHOLDERS’ EQUITY Current liabilities: Accounts payable $ 178,764 $ 130,489 Accrued compensation and benefits 40,888 30,285 Accrued expenses 46,812 102,123 Deferred revenue 53,270 — Deferred gross profit, related party 87,379 50,479 Deferred rent, current   5,423     4,847   Total current liabilities 412,536 318,223 Deferred rent, non-current   34,076     35,815   Total liabilities 446,612 354,038 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 March 31, 2011, and December 31, 2010 49,721 49,721 Additional paid-in capital 48,444,113 48,392,985 Accumulated deficit   (44,277,996 )   (43,568,262 ) Total stockholders’ equity   4,215,838     4,874,444   Total liabilities and stockholders’ equity $ 4,662,450   $ 5,228,482    

HELIX BIOMEDIX, INC.

CONDENSED STATEMENTS OF OPERATIONS

(Unaudited)

      Three months ended March 31, 2011 2010 Revenue: Licensing fees $ 171,425 $ 36,558 Peptide and consumer product sales 134,932 33,160 Consumer product sales , related party   51,271     —   Total revenue   357,628     69,718   Cost of revenue: Cost of peptide and consumer product sales 91,297 24,489 Cost of consumer product sales, related party   29,530     —   Total cost of revenue   120,827     24,489   Gross profit 236,801 45,229 Operating expenses: Research and development 225,163 167,672 Marketing and business development 204,437 126,238 General and administrative 341,792 359,745 Accounting, legal and professional fees 165,437 121,607 Depreciation and amortization   26,617     29,082   Total operating expenses   963,446     804,344   Loss from operations   (726,645 )   (759,115 ) Other income (expense): Interest income 1,204 345 Interest expense on convertible notes payable — (28,528 ) Interest expense on convertible notes payable, related party — (115,704 ) Accretion of discount on convertible notes payable — (9,097 ) Accretion of discount on convertible notes payable, related party — (14,950 ) Equity in earnings of affiliated company 7,992 — Change in value of derivative instruments, related party   7,715     —   Other income (expense), net   16,911     (167,934 ) Net loss and comprehensive loss $ (709,734 ) $ (927,049 ) Basic and diluted net loss per share $ (0.01 ) $ (0.04 ) Weighted average shares outstanding   49,720,255     25,653,512