Cellular Biomedicine Group Inc. (NASDAQ:CBMG) (“CBMG” or the “Company”), clinical-stage biopharmaceutical firm engaged in the development of effective immunotherapies for cancer and stem cell therapies for degenerative diseases, today reported financial results for the first quarter ended March 31, 2017 and provided business highlights.

“The first quarter of 2017 was very productive, with several key achievements, including the commencement of our second Phase I CAR-T clinical trial utilizing CBMG’s proprietary and optimized CD19 construct, for the treatment of adult patients with relapsed or refractory CD19+ B-cell Acute Lymphoblastic Leukemia (ALL),” commented Tony Liu, Chief Executive Officer of CBMG. “The award of $2.29 million from the California Institute for Regenerative Medicine (CIRM) to support pre-clinical studies of AlloJoinTM in the U.S., moves forward our endeavor into the U.S. market and the development of an off-the-shelf stem cell product to treat Knee Osteoarthritis (KOA). The signing of a collaboration with GE Healthcare Life Sciences China to establish a joint laboratory within our own GMP facilities in Shanghai credits our GMP stature and capabilities. We are determined to build on our accomplishments from the first quarter to continue to strengthen our innovative pipelines and move our clinical assets into later stage development.  We believe we are ahead of the competitive curve in addressing the manufacturing barriers to delivering consistent clinical grade cell therapies which have the potential to address the large cancer and knee osteoarthritis markets.”

First Quarter 2017 Financial Performance

  1. Cash Position: Cash and cash equivalents as of March 31, 2017 were $33.4 million compared to $39.3 million as of December 31, 2016.
  2. Net Cash Used in Operating Activities: Net cash used in operating activities for the first quarter of 2017 was $4.86 million, compared to $3.58 million for the same period in 2016.
  3. G&A Expenses: General and administrative expenses for the first quarter of 2017 were $3.2 million compared to $2.8 million for the same period in 2016.  The increase is in large part attributed to the rental increase, which resulted from the new leased facilities located in the “Pharma Valley” of Shanghai from January 1, 2017.
  4. R&D Expenses: Research and development expenses for the first quarter of 2017 were $3.0 million, compared to $2.4 million for the same period a year ago. The increase was primarily attributable to headcount increases of R&D staff and increased expenses related to advancing assets into clinical trials.
  5. Net Loss: Net loss allocable to common stock holders was $6.2 million, compared to $4.2 million for the same period in 2016.

Business & Technology Highlights of 2017 To Date

  • Commenced CALL-1 (“CAR-T against Acute Lymphoblastic Leukemia”) Phase I clinical trial in China utilizing its optimized proprietary C-CAR011 construct of CD19 chimeric antigen receptor T-cell (CAR-T) therapy for the treatment of patients with relapsed or refractory (r/r) CD19+ B-cell Acute Lymphoblastic Leukemia (ALL);
  • Awarded $2.29 million by California Institute for Regenerative Medicine (CIRM), California’s stem cell agency, to support pre-clinical studies of AlloJoinTM, CBMG’s “Off-the-Shelf” Allogeneic Human Adipose-derived Mesenchymal Stem Cells for the treatment of Knee Osteoarthritis in the United States;•  On May 4, 2017, the Company received $1.2 million from the CIRM grant, the first of four disbursements
  • Completed expansion of its 30,000 square foot facility in Huishan High Tech Park in Wuxi, China, with 20,000 square feet of the Wuxi GMP facility dedicated to advanced stem cell culturing, centralized plasmid and viral vector production, cell banking and development of reagents;
  • Began construction of a new GMP facility in “Pharma Valley” in Shanghai Zhangjiang High-Tech Park, which will consist of 40,000 square feet dedicated to advanced cell manufacturing;
  • Established a strategic research collaboration with GE Healthcare Life Sciences China to co-develop certain high-quality industrial control processes in Chimeric Antigen Receptor T-cell (CAR-T) and stem cell manufacturing and to form a joint laboratory within CBMG’s new Shanghai Zhangjiang GMP-facility dedicated to the joint research and development of a functionally integrated and automated immunotherapy cell preparation system.

About Cellular Biomedicine Group Cellular Biomedicine Group, Inc. (NASDAQ:CBMG) develops proprietary cell therapies for the treatment of cancer and degenerative diseases. We conduct immuno-oncology and stem cell clinical trials in China using products from our integrated GMP laboratory. Our GMP facilities in China, consisting of twelve independent cell production lines, are designed and managed according to both China and U.S. GMP standards.  CBMG recently commenced two Phase I human clinical trials in China using CAR-T to treat relapsed/refractory CD19+ B-cell Acute Lymphoblastic Leukemia (ALL) and Refractory Diffuse Large B-cell Lymphoma (DLBCL) as well as an ongoing Phase I trial in China for AlloJoinTM (CBMG’s “Off-the-Shelf” Allogeneic Human Adipose-derived Mesenchymal Stem Cell) for the treatment of Knee Osteoarthritis (KOA). CBMG was recently awarded $2.29 million from the California Institute for Regenerative Medicine (CIRM) to support pre-clinical studies of AlloJoinTM for Knee Osteoarthritis in the United States. The Company also recently announced a strategic partnership with GE Healthcare Life Sciences China to establish a joint technology laboratory to develop control processes for the manufacture of CAR-T and stem cell therapies. To learn more about CBMG, please visit www.cellbiomedgroup.com.

Forward-Looking Statements Statements in this press release relating to plans, strategies, trends, specific activities or investments, and other statements that are not descriptions of historical facts may be forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Forward-looking information is inherently subject to risks and uncertainties, and actual results could differ materially from those currently anticipated due to a number of factors, which include risks inherent in doing business, trends affecting the global economy, including the devaluation of the RMB by China in August 2015 and other risks detailed from time to time in CBMG’s reports filed with the Securities and Exchange Commission, quarterly reports on form 10-Q, current reports on form 8-K and annual reports on form 10-K. Forward-looking statements may be identified by terms such as "may," "will," "expects," "plans," "intends," "estimates," "potential," or "continue," or similar terms or the negative of these terms. Although CBMG believes the expectations reflected in the forward-looking statements are reasonable, they cannot guarantee that future results, levels of activity, performance or achievements will be obtained. CBMG does not have any obligation to update these forward-looking statements other than as required by law.

 
CELLULAR BIOMEDICINE GROUP, INC.
CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS AND COMPREHENSIVE LOSS
(UNAUDITED)
         
    For the Three Months Ended
    March 31,
      2017       2016  
         
Net sales and revenue   $ 98,425     $ 488,491  
         
Operating expenses:        
Cost of sales     37,402       503,193  
General and administrative     3,185,247       2,775,925  
Selling and marketing     117,884       178,754  
Research and development     3,044,125       2,398,362  
Total operating expenses     6,384,658       5,856,234  
Operating loss     (6,286,233 )     (5,367,743 )
         
Other income        
Interest income     49,182       17,050  
Other income     77,508       16,320  
Total other income     126,690       33,370  
Loss before taxes     (6,159,543 )     (5,334,373 )
         
Income taxes credit (provision)     (2,450 )     1,124,260  
         
Net loss   $ (6,161,993 )   $ (4,210,113 )
Other comprehensive income:        
Cumulative translation adjustment     53,669       16,073  
Unrealized gain on investments, net of tax of nil and $4,514,060, for the three months ended March 31, 2017 and 2016, respectively     -       16,416,517  
Total other comprehensive income:     53,669       16,432,590  
         
Comprehensive income (loss)   $ (6,108,324 )   $ 12,222,477  
         
Net loss per share :        
Basic   $ (0.43 )   $ (0.35 )
Diluted   $ (0.43 )   $ (0.35 )
         
Weighted average common shares outstanding:        
Basic     14,281,745       11,884,066  
Diluted     14,281,745       11,884,066  
 
CELLULAR BIOMEDICINE GROUP, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
           
    March 31,     December 31,
    2017     2016
           
 Assets        
Cash and cash equivalents $ 33,361,784       $ 39,252,432  
Accounts receivable, less allowance for doubtful amounts of $10,218        
and $10,163 as of March 31, 2017 and December 31, 2016, respectively   79,602         39,974  
Other receivables   813,077         412,727  
Prepaid expenses   1,071,447         986,951  
Total current assets   35,325,910         40,692,084  
           
Investments   509,424         509,424  
Property, plant and equipment, net   4,449,268         4,117,739  
Goodwill   7,678,789         7,678,789  
Intangibles, net   13,677,958         14,092,581  
Long-term prepaid expenses and other assets   1,949,542         1,537,850  
Total assets $ 63,590,891       $ 68,628,467  
           
Liabilities and Stockholders' Equity        
           
Liabilities:        
Accounts payable $ 782,450       $ 216,154  
Accrued expenses   325,486         1,168,787  
Taxes payable   31,325         28,875  
Other current liabilities   866,223         950,220  
Total current liabilities   2,005,484         2,364,036  
           
Other non-current liabilities   362,356         370,477  
Total liabilities   2,367,840         2,734,513  
           
Stockholders' equity:        
           
Preferred stock, par value $.001, 50,000,000 shares        
authorized; none issued and outstanding as of        
March 31, 2017 and December 31, 2016, respectively   -         -  
           
Common stock, par value $.001, 300,000,000 shares authorized;        
14,286,013 and 14,281,378 issued and outstanding        
as of March 31, 2017 and December 31, 2016, respectively   14,286         14,281  
Additional paid in capital   153,980,468         152,543,052  
Accumulated deficit   (91,708,680 )       (85,546,687 )
Accumulated other comprehensive loss   (1,063,023 )       (1,116,692 )
Total stockholders' equity   61,223,051         65,893,954  
           
Total liabilities and stockholders' equity $ 63,590,891       $ 68,628,467  
           
CELLULAR BIOMEDICINE GROUP, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS(UNAUDITED)
         
    For the Three Months Ended
    March 31,
      2017       2016  
     
CASH FLOWS FROM OPERATING ACTIVITIES:        
Net loss   $ (6,161,993 )   $ (4,210,113 )
Adjustments to reconcile net loss to net cash        
used in operating activities:        
Depreciation and amortization     669,739       671,649  
Loss on disposal of assets     237       -  
Stock based compensation expense     1,431,907       1,266,063  
Changes in operating assets and liabilities:        
Accounts receivable     (39,411 )     50,764  
Other receivables     (398,190 )     9,705  
Inventory     -       (96,083 )
Prepaid expenses     (78,832 )     (274,829 )
Taxes recoverable     -       150,082  
Long-term prepaid expenses and other assets     6,524       (38,522 )
Accounts payable     565,236       (51,992 )
Accrued expenses     (844,172 )     57,178  
Other current liabilities     (2,012 )     29,415  
Taxes payable     2,450       32,450  
Deferred tax liabilities     -       (1,128,515 )
Other non-current liabilities     (10,146 )     (50,049 )
Net cash used in operating activities     (4,858,663 )     (3,582,797 )
         
CASH FLOWS FROM INVESTING ACTIVITIES:        
Purchases of intangibles     (23,268 )     -  
Purchases of property, plant and equipment     (1,026,994 )     (674,736 )
Net cash used in investing activities     (1,050,262 )     (674,736 )
         
CASH FLOWS FROM FINANCING ACTIVITIES:        
Net proceeds from the issuance of common stock     -       4,970,002  
Proceeds from exercise of stock options     5,514       93,249  
Net cash provided by financing activities     5,514       5,063,251  
         
EFFECT OF EXCHANGE RATE CHANGES ON CASH     12,763       (22,786 )
         
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS     (5,890,648 )     782,932  
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD     39,252,432       14,884,597  
CASH AND CASH EQUIVALENTS, END OF PERIOD   $ 33,361,784     $ 15,667,529  
         
SUPPLEMENTAL CASH FLOW INFORMATION        
         
Cash paid for income taxes   $ -     $ (4,255 )
Contacts:
Sarah Kelly 
Director of Corporate Communications, CBMG
+1 408-973-7884
sarah.kelly@cellbiomedgroup.com

Vivian Chen
Managing Director Investor Relations, Citigate Dewe Rogerson
+1 347 481-3711
vivian.chen@citigatedr.com
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