HELIX BIOPHARM REPORTS FIRST QTR FISCAL 2007 LOSS.

Helix BioPharma Corp. (TSX, FSE: "HBP"), Aurora, Ont., Canada, has announced financial results for the first quarter of fiscal 2007, ended October 31, 2006.

Highlights

- Initiated enrollment in Phase II clinical trial with Topical Interferon Alpha-2B in patients with ano-genital warts

- Announced the completed enrollment and treatment of the Phase II clinical study with Topical Interferon Alpha-2b in patients with low-grade squamous intraepithelial lesions and the expected timing of when the results will be reported (early 2007).

- Completed a private placement financing for gross proceeds of $7,044,500.

Results From Operations

Three month period ended October 31, 2006 compared to the same period in the previous year

During the first quarter of fiscal 2007, the company recorded a loss of $1,342,000 or $0.04 per common share, resulting in a decrease of $109,000 or 7.5% when compared to the first quarter of fiscal 2006, when the company recorded a loss of $1,451,000, or $0.05 per common share.

Revenues were marginally lower in the first quarter of fiscal 2007 when compared to the first quarter of 2006 with slightly lower margins. Excluding the foreign exchange loss for the quarter and net interest income, overall expenses were relatively flat in the first quarter of fiscal 2007 compared to fiscal 2006, with higher operating, general and administration costs along with research and development costs being offset by the reduction in the amortization expense of intangible assets.

Cost of sales totalled $290,000 in the first quarter of fiscal 2007 (2006 - $313,000). Margins were mainly impacted by product mix, while the Canadian dollar remained relatively unchanged in the comparative quarters. On a percentage basis, margins in the first quarter of fiscal 2007 were 58.3% (2006 - $57.5%).

Research and development costs in the first quarter of fiscal 2007 totalled $871,000 (2006 - $640,000) for an increase of $231,000. Higher research and development costs in the first quarter of fiscal 2007 mainly reflect L-DOS47 initiatives currently underway and preparatory work for the Phase II trial in Sweden, for an additional therapeutic application of Topical Interferon Alpha-2b. The company expects to increase its spending through the remainder of fiscal 2007, as its Topical Interferon Alpha-2b and L-DOS47 product candidates continue to be developed.

Operating, general and administration expenses in the first quarter of fiscal 2007 totalled $906,000 (2006 - $866,000), for an increase of $40,000. Higher premiums on Director's and Officers insurance along with increased investor relations and regulatory filing fees were offset by a reduction in marketing promotional expenditures.

Amortization of intangible assets in the first quarter of fiscal 2007 totalled $40,000 (2006 - $301,000). The variance is due to a certain intangible asset which is now fully amortized. Amortization of capital assets in first quarter of fiscal 2007 totalled $77,000 (2006 - $81,000) or relatively unchanged when compared to the first quarter of 2006.

Stock-based compensation expense in the first quarter of fiscal 2007 totalled $12,000 (2006 - $43,000). The company granted an additional 20,000 stock options in the first quarter of fiscal 2006, with a fair value of $29,000. The stock-based compensation expense relates to the ongoing amortization of stock options granted on June 30, 2005, over their vesting period.

Interest income in the first quarter of fiscal 2007 totalled $102,000 (2006 - $29,000). The increase in interest income is the result of higher cash balances during the first quarter of fiscal 2007 versus 2006.

Foreign exchange losses in the first quarter of fiscal 2007 totalled $45,000 (2006 - $112,000). The variance is mainly due to the foreign currency translation of the company's integrated foreign operation in Ireland. The higher net assets of the company's Irish operations, coupled with the dramatic appreciation of the Canadian dollar versus the Euro in fiscal 2006, are the main reasons behind the variance in the comparative first quarters. The net assets of the company's integrated foreign operation in Ireland consists mainly of cash and cash equivalents, denominated in Euro currency and are used to fund its Phase II Topical Interferon Alpha-2b clinical program in Europe.

Income tax expense in the first quarter of fiscal 2007 totalled $29,000 (2006 - $30,000). All income taxes are attributable to the company's operations in Europe.

Cash Flow

Net loss from operations totalled $1,342,000 in the first quarter of fiscal 2007 (2006 - $1,451,000) for a decrease of $109,000. Adjusting for non-cash and working capital items, the cash used in the first quarter of fiscal 2007 totalled $1,421,000 (2006 - $707,000) and represents an increase of $714,000. Of this amount, approximately $220,000 is attributable to higher working capital for Rivex Pharma and more specifically an increase in inventory balances, just prior to the end of the first quarter, with the remainder attributable mostly to ongoing research and development activity.

Financing activities in the first quarter of fiscal 2007 provided additional cash of $6,473,000 (2006 - $3,696,000), an increase of $2,777,000. In both first quarters of fiscal 2007 and 2006, the company completed private placements with net proceeds of $6,480,000 and $3,700,000 respectively. The company also made debt repayments in both first quarters of fiscal 2007 and 2006 of $7,000 and $4,000, respectively.

Investing activities in the first quarter of fiscal 2007 provided additional cash of $6,625,000 (2006- $986,000), an increase of $5,639,000. The company maintains excess funds in short term investments and redeems these funds as required, for its daily operating requirements. The increase in investing activity is mainly reflected in the company redeeming $6,640,000 of short term investments in the first quarter of fiscal 2007 compared to $990,000 in the first quarter of fiscal 2006. Capital purchases in the first quarter of fiscal 2007 totalled $15,000 (2006 - $4,000), a decrease of $11,000.

Liquidity And Capital Resources

Since inception, the company has financed its operations from public and private sales of equity, the exercise of warrants and stock options, interest income on funds available for investment, government grants, investment tax credits and revenues from distribution, licensing and contract services.

On October 11, 2006, the company announced the completion of a private placement, issuing 3,650,000 units at $1.93 per unit, for gross proceeds of $7,044,500. Each unit consists of one common share and one common share purchase warrant. Each common share purchase warrant entitles the holder to purchase one common share at a price of $2.70 until March 31, 2008. Of the gross proceeds amount, $1,168,000 was allocated to the share purchase warrants based on fair value and the residual amount of $5,876,500 was allocated to common stock. Share issue costs totalling $565,000 were proportionately allocated to the share purchase warrants ($94,000) and common stock ($471,000), respectively.

At October 31, 2006, the company had cash and cash equivalents, along with short-term investments totalling $16,024,000 (2006 - $11,032,000), an increase of $4,992,000. The total number of common shares issued at the end of the first quarter of fiscal 2007 was 36,335,335 (2006 - 29,522,906).

After taking into consideration the improved working capital resulting from the successful completion of the private placements, the decrease in royalty rate from the Helsinn-Birex license, planned expenditures for research and development for the Phase II clinical program of the company's Topical Interferon Alpha-2b, research expenditures relating to the company's novel anti-cancer therapeutic, L-DOS47, and marketing expenditures relating primarily to Orthovisc(R), the company expects that its working capital will be sufficient to finance operations to July 2008. The company will continue to seek additional funding, primarily by way of equity offerings, to carry out its business plan and to minimize risks to its operations. The market, however, for equity financings for companies such as Helix is challenging, and there can be no assurance that additional funding by way of equity financing will be available. The failure of the company to obtain additional funding on a timely basis may result in the company reducing or delaying one or more of its planned research, development and marketing programs and reducing related personnel, any of which could impair the current and future value of the business. Any additional equity financing, if secured, may result in significant dilution to the existing shareholders at the time of such financing. The company may also seek additional funding from other sources, including technology licensing, co-development collaborations, and other strategic alliances, which, if obtained, may reduce the company's interest in its projects or products. There can be no assurance, however, that any alternative sources of funding will be available.

About Helix BioPharma Corp.

Helix BioPharma Corp. is a biopharmaceutical company specializing in the field of cancer therapy. The company is actively developing innovative products for the prevention and treatment of cancer based on its proprietary technologies. Helix's product development initiatives include its Topical Interferon Alpha-2b and its novel L-DOS47 new drug candidate. Helix is listed on the TSX under the symbol "HBP".

For more information, call 800/385-5451 or 416/815-0700, ext. 269.