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                                                                   EXHIBIT 10.23

                        SEPARATION AGREEMENT AND RELEASE

      This Separation Agreement and Release ("Agreement and Release") is made as
of October 12, 2006 (the "Execution Date"), by and among Helix BioMedix, Inc.
("Helix"), and David Drajeske ("Drajeske"). Helix and Drajeske are sometimes
referred to collectively as the "Parties."

                                    RECITALS

      I. On August 12, 2004, Helix and Drajeske entered into an Employment
Agreement ("Employment Agreement") pursuant to which Helix agreed to employ
Drajeske, and Drajeske accepted employment, as Vice-President - Business
Development of Helix.

      II. Drajeske and Helix have agreed to terminate the Employment Agreement
pursuant to the terms and conditions of this Agreement and Release.

      III. The Parties also desire to settle and resolve any and all possible
disputes growing out of or related to Drajeske's employment relationship with
Helix, including but not limited to any possible claims Drajeske could assert
against Helix and any affiliates, subsidiaries, directors, officers,
shareholders, employees, agents or anyone else against whom Drajeske could
assert a claim due to his employment with Helix or its termination.

                              AGREEMENT AND RELEASE

      Therefore, Helix on the one hand and Drajeske on the other hand, intending
to be legally bound, agree as follows:

      1. NON-ADMISSION; CONFIDENTIALITY OF AGREEMENT AND RELEASE. Drajeske
agrees that this Agreement and Release is not an admission by Helix that it (or
any of its directors, officers, shareholders, employees or agents) has violated
any law or failed to fulfill any duty to Drajeske. Drajeske and Helix both agree
to keep this Agreement and Release confidential, except insofar as disclosure
may be required for legal or business reasons.

      2. TERMINATION OF EMPLOYMENT. Helix and Drajeske agree to discontinue
Drajeske's employment relationship and terminate the Employment Agreement
effective October 15, 2006 ("Resignation Date").

      3. SEPARATION PAYMENT. As consideration for this Agreement and Release,
Helix agrees to pay Drajeske an aggregate amount of $100,000, subject to lawful
deductions, payable in six (6) equal monthly installments. The payment under
this paragraph 3 will be made after the seventh day after this Agreement and
Release is signed by Drajeske and delivered to Helix (the "Effective Date") as
set forth below in paragraph 8.

      4. ACKNOWLEDGEMENT OF PAYMENT. Drajeske specifically acknowledges and
agrees that the consideration identified in paragraph 3 above exceeds the amount
Drajeske would otherwise be entitled to receive upon termination of Drajeske's
employment with Helix, and that the consideration set forth above is in exchange
for entering into this Agreement and Release. Drajeske further agrees that he
will not at any time in the future seek consideration

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from Helix other than as set forth in this Agreement and Release. Drajeske
specifically acknowledges and agrees that Helix has not made any representations
to Drajeske regarding the tax or legal consequences of any consideration due to
Drajeske or for his benefit pursuant to this Agreement and Release.

      5. STOCK OPTIONS. Helix and Drajeske acknowledge and agree that as of the
Resignation Date, Drajeske holds vested options to purchase up to 164,444 shares
of Helix's common stock. Such vested options shall terminate on October 15,
2009; any options held by Drajeske that are unvested as of the Resignation Date
shall terminate in their entirety as of the Resignation Date.

      6. NON-DISPARAGEMENT. Helix agrees that neither it, nor anyone acting on
its behalf, will make any negative, derogatory, or disparaging statements,
whether oral or written, regarding Drajeske. Drajeske agrees that neither he,
nor anyone acting on his behalf, will make any negative, derogatory, or
disparaging statements, whether oral or written, regarding Helix, or any of its
directors, officers, or employees.

      7. RELEASE. Drajeske accepts the undertakings of Helix in this Agreement
and Release as full settlement of any and all claims, known or unknown, arising
out of or related to Drajeske's association with Helix, including his employment
or its termination. This release by Drajeske includes, but is not limited to,
any claims for damages or attorney's fees, breach of contract, lost equity-based
compensation or lost salary or other benefits, and specifically includes, but is
not limited to claims under the Age Discrimination in Employment Act ("ADEA"),
Title VII of the Civil Rights Act of 1964, the Americans with Disabilities Act,
the Older Workers' Benefit Protection Act, the Fair Labor Standards Act, the
Family and Medical Leave Act, the Employee Retirement Income Security Act of
1974 (other than claims for vested benefits), the Washington Law Against
Discrimination in Employment, RCW Ch. 49.60.010 et. seq., Washington's wage and
hour laws, all as amended, and the civil rights, employment and labor laws of
any city, locality, state and the United States. These claims are examples, not
a complete list, of the released claims, as it is the Parties' intent that
Drajeske release any and all claims, of whatever kind or nature, in exchange for
the undertakings in this Agreement and Release by Helix. Drajeske realizes that
this constitutes a full and final settlement of any and all claims, and except
for obligations arising under this Agreement and Release, this releases Helix
(and its directors, officers, shareholders and employees of Helix, and anyone
else against whom Drajeske could assert any of the released claims) from any
further liability to Drajeske (or to anyone else he has power to bind in this
Agreement and Release) in connection with such claims.

      8. RELEASE OF CLAIMS UNDER THE ADEA. Drajeske acknowledges that he is
waiving and releasing any rights he may have under the ADEA and that this waiver
and release is knowing and voluntary. The Parties agree that this waiver and
release does not apply to any rights or claims that may arise under the ADEA
after the execution of this Agreement and Release. Drajeske acknowledges and
agrees that he has been advised by this writing that (a) this waiver and release
does not apply to any rights or claims that may arise after the Execution Date
of this Agreement and Release; (b) he should consult with an attorney prior to
executing this Agreement and Release; (c) he has twenty-one (21) days within
which to consider this Agreement and Release (although he may choose to
voluntarily execute this Agreement and Release earlier and waive such period of
consideration); (d) he has seven (7) days following the

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execution of this Agreement and Release to revoke this Agreement and Release;
(e) this Agreement and Release shall not be effective until the revocation
period has expired (as set forth above, the Effective Date); and (f) nothing in
this Agreement prevents or precludes Drajeske from challenging or seeking a
determination in good faith of the validity of this waiver and release under the
ADEA, nor does it impose any condition precedent, penalties or costs for doing
so, unless specifically authorized by federal law. To cancel this Agreement and
Release, Drajeske understands that he must give a written revocation which must
be received by Helix by 5:00 p.m. on the seventh day after this Agreement and
Release is signed by Drajeske, addressed to the following individual at the
following location:

              Steve Beatty, President
              Helix BioMedix, Inc.
              22122 20th Avenue SE, Suite 148
              Bothell, WA 98021

      Drajeske understands that if Drajeske revokes this Agreement and Release
pursuant to this paragraph 8, the Agreement and Release will not become
effective or enforceable and Drajeske will not be entitled to any of the
benefits set forth in this Agreement and Release.

      9. RETURN OF HELIX PROPERTY. Drajeske acknowledges and agrees that he has
returned to Helix all personal property and equipment furnished to or prepared
by Drajeske in the course of or incident to his employment by Helix, including,
without limitation, computers, cell phones, keys, all books, manuals, memoranda,
records, reports, notes, contracts, lists, blueprints, and other documents, or
materials, or copies thereof (including computer files), and all other
proprietary information belonging or relating to the business of Helix or any
affiliate. Drajeske also acknowledges and agrees that he has not retained any
written or other tangible materials containing any proprietary information of
Helix or any affiliate.

      10. RESTRICTIVE COVENANTS.

          (a) Confidentiality of Information.

              i. Definition. Drajeske and Helix agree that "Confidential
Information" shall mean any and all trade secrets, ideas, suggestions,
innovations, conceptions, discoveries, strategies, improvements, technological
developments, methods, processes, specifications, formulae, compositions,
techniques, systems, computer software and programs, notes, memoranda, work
sheets, lists of actual or potential customers and suppliers, pricing
information and policies, works of authorship, products, data, and information
in any form, which concern or relate to any aspect of the actual or contemplated
business of Helix and which may be stamped "confidential" or are otherwise
treated as confidential by Helix, except for such items as Drajeske can prove
through clear and convincing evidence were in the public domain, being publicly
and openly known, prior to the date of commencement of Drajeske's employment by
Helix or, subsequent to such date, became a part of the public domain, being
publicly and openly known, through lawful and proper means.

              ii. Scope. Drajeske agrees that he shall not at any time take or
use, or otherwise disclose to anyone, any Confidential Information, except as
required by any court or

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governmental agency after receipt by Drajeske of a lawful subpoena or court
order. Drajeske further agrees that in the event he is served with a subpoena of
court order, he will immediately notify Helix, in the manner set forth in
paragraph 8 above, of his receipt of the subpoena or court order.

              iii. Restrictions. Drajeske agrees that the restrictions set forth
in this paragraph are reasonable and necessary to protect Helix.

              iv. Common Law Obligations. This paragraph is not intended to, and
does not, limit in any way Drajeske's duties and obligations to Helix under
statutory and common law not to disclose or make personal use of any
Confidential Information of Helix.

          (b) Assignment of Inventions.

              i. Definition of Inventions. "Inventions" means discoveries, works
of authorship, mask works, developments, concepts, ideas and information made or
conceived or reduced to practice, methods, designs, improvements, inventions,
formulas, processes, techniques, programs, know-how and data, whether or
notpatentable or registrable under copyright or similar statutes, except any of
the foregoing that (a) is not related to the business of Helix, or Helix's
actual or demonstrable research or development; (b) did not involve the use of
any equipment, supplies, facility or Confidential Information of Helix; (c) was
developed entirely on Drajeske's own time; and (d) did not result from any work
performed by Drajeske for Helix. To the extent allowed by law, Inventions will
also include all "moral rights" "artist's rights" or the like.

              ii. Assignment. Drajeske agrees to and hereby does assign to
Helix, without further consideration, all of his right, title and interest in
any and all Inventions he may have made during his association with Helix. To
the extent that Drajeske retains any moral or artist's rights, he ratifies and
consents to any action that may be taken with respect to such rights by or
authorized by Helix and agrees not to assert any such rights with respect
thereto.

              iii. Duty to Assist. Drajeske agrees to provide all assistance
reasonably requested by Helix in the preservation of Helix's interests in the
Inventions including obtaining patents in any country throughout the world. Such
services will be for reasonable compensation and subject to Drajeske's
reasonable availability. If Helix cannot, after reasonable effort, secure
Drajeske's signature on any document or documents needed to apply for or
prosecute any patent, copyright, or other right or protection relating to an
Invention, whether because of his physical or mental incapacity or for any other
reason whatsoever, Drajeske hereby irrevocably designates and appoints Helix and
its duly authorized officers and agents as his agent and attorney-in-fact, to
act for and in his behalf and in his name and stead for the purpose of executing
and filing any such application or applications and taking all other lawfully
permitted actions to further the prosecution and issuance of patents,
copyrights, or similar protections thereon, with the same legal force and effect
as if executed by him.

              iv. Ownership of Copyrights. Drajeske agrees that any work
prepared for Helix, which is eligible for copyright protection under the laws of
the United States or any other country, is work made for hire and ownership of
all copyrights (including all renewals and

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extensions) therein vests in Helix. If any such work is deemed not to be a work
made for hire for any reason, Drajeske hereby grants, transfers and assigns all
right, title and interest in such work and all copyrights in such work and all
renewals and extensions thereof to the establishment, preservation and
enforcement of Helix's copyright in such work, such assistance to be provided at
Helix's expense. Drajeske agrees and does hereby waive the enforcement of all
moral rights with respect to the work developed or produced as set forth in this
Agreement and Release, including without limitation any and all rights of
identification of authorship and any and all rights of approval, restriction or
limitation on use or subsequent modifications.

              v. Litigation. Drajeske agrees to render assistance and
cooperation to Helix at its request regarding any matter, dispute or controversy
with which Helix may become involved and of which Drajeske has or may have
reason to have knowledge, information or expertise. Such services will be for
reasonable compensation and subject to his reasonable availability.

          (c) Covenants Not to Compete.

              i. Noncompetition and Nonsolicitation. For a period of one (1)
year following the Resignation Date, Drajeske shall not solicit any licensor to
or customer of Helix or licensee of Helix's products, that are known to
Drajeske, with respect to any business, products or services that are
competitive to the products or services offered by Helix or under development as
of the Resignation Date.

              ii. Nonsolicitation of Employees. Drajeske agrees that Helix has
invested substantial time and effort in assembling its workforce. Accordingly,
Drajeske agrees that for a period of two (2) years after the Resignation Date of
this Agreement and Release, Drajeske will not, directly or indirectly, employ,
solicit or induce or attempt to influence any employee of Helix or any
affiliate, to terminate his or her employment with Helix or any affiliate, or to
work for Drajeske or any other person or entity.

              iii. Severability and Modification of Any Unenforceable Covenant.
It is the Parties' intent that each of the covenants set forth in this Agreement
and Release be read and interpreted with every reasonable inference given to its
enforceability. However, it is also the Parties' intent that if any term,
provision or condition of such covenants is held by an arbitrator or court of
competent jurisdiction to be invalid, void or unenforceable, the remainder of
the provisions will remain in full force and effect and will in no way be
affected, impaired or invalidated. Finally, it is also the Parties' intent that
if an arbitrator or court should determine any of the covenants set forth herein
are unenforceable because of over breadth, then the arbitrator or court will
modify said covenant so as to make it as broad as is reasonable and enforceable
under the prevailing circumstances.

      11. AUTHORITY TO ENTER AGREEMENT. Drajeske represents and warrants that he
is the true party in interest, that he is fully authorized to execute this
Agreement and Release, and that he has not sold, assigned, transferred,
conveyed, or otherwise disposed of any rights surrendered by virtue of this
Agreement and Release.

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      12. BINDING EFFECT. This Agreement and Release shall be binding upon and
inure to the benefit of any heirs, legal representatives, successors and assigns
of Drajeske and Helix.

      13. DISPUTE RESOLUTION.

          (a) With respect to disputes under this Agreement and Release that are
not resolved by the Parties pursuant upon written request by one party to the
other party, the Parties shall promptly negotiate in good faith to appoint a
mutually acceptable disinterested, conflict-free individual not affiliated with
any party, with relevant contract experience necessary to resolve such dispute
(an "Arbitrator"). If the Parties are not able to agree within three (3) days
after the receipt by a party of the written request in the immediately preceding
sentence, the American Arbitration Association ("AAA") shall be responsible for
selecting an Arbitrator within seven (7) days of being approached by a party.
The fees and costs of the Arbitrator and the AAA shall be shared equally by the
Parties.

          (b) Within fifteen (15) days after the designation of the Arbitrator,
the Parties shall each simultaneously submit to the Arbitrator and one another a
written statement of their respective positions on such disagreement. The
Parties shall have two (2) days from receipt of the filing party's submission to
submit a written response thereto. The Arbitrator shall have the right to meet
with the Parties, either alone or together, as necessary to make a
determination.

          (c) No later than fifteen (15) days after the designation of the
Arbitrator, the Arbitrator shall make a determination by selecting the
resolution proposed by one of the Parties that as a whole is the most fair and
reasonable to the Parties in light of the totality of the circumstances and
shall provide the Parties with a written statement setting forth the basis of
the determination in connection therewith. The decision of the Arbitrator shall
be final and conclusive, absent manifest error.

          (d) Notwithstanding other provisions of this paragraph 13, Drajeske
acknowledges and agrees that any violation, breach, or threatened breach by
Drajeske of paragraph 10 of this Agreement and Release would cause Helix
irreparable harm which would not be adequately compensated by monetary damages
and that a temporary restraining order, permanent restraining order or
injunction may be granted by any court or courts having jurisdiction,
restraining Drajeske from violation, breach or threatened breach of paragraph 10
of this Agreement and Release. This paragraph 13(d) shall not be construed to
limit Helix from any other relief or damages to which it may be entitled as a
result of Drajeske's breach of paragraph 10 of this Agreement and Release.
Drajeske also agrees that a violation of paragraph 10 of this Agreement and
Release would entitle Helix, in addition to all other remedies available at law
or equity, to recover from Drajeske all funds remaining to be paid out under
paragraph 3 of this Agreement and Release, and will be held in trust by Helix.

      14. WASHINGTON LAW TO APPLY. This Agreement and Release shall in all
respects be governed by the laws of the State of Washington. Venue for any
action to enforce any provision of this Agreement shall be exclusively in King
County with an arbitrator from King County, Washington. The Parties, by their
signatures below, agree to submit to said arbitrator's jurisdiction and to waive
all defenses related to jurisdiction and venue. Except as

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prohibited by law, the prevailing party in any arbitration or litigation brought
to enforce this Agreement and Release shall be entitled to recover its costs
including reasonable attorneys' fees.

      15. GENERAL. This Agreement and Release: (i) represents the entire
understanding of the Parties with respect to the subject matter covered; (ii)
supersedes all prior and contemporaneous oral understandings with respect to
such subject matter; (iii) may only be amended in a writing signed by the
Parties; and (iv) shall be executed in two or more counterparts so that each
party may retain a fully executed original.

      16. KNOWING AND VOLUNTARY WAIVER. Drajeske acknowledges that he has been
advised to consult with an attorney, and has had the opportunity to do so before
signing this Agreement and Release, which Drajeske has been given a reasonable
period of time to consider and which Drajeske may revoke within seven (7) days
after signing.

      Executed as of the Execution Date written above.

____________________________________         Helix BioMedix, Inc.
David Drajeske

                                             By:  ______________________________

                                             Its: ______________________________

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