CBMG Cellular Biomedicine Group Inc

Cellular Biomedicine Group Inc. (NASDAQ:CBMG) (“CBMG” or the “Company”), a clinical-stage biopharmaceutical firm engaged in the development of effective immunotherapies for cancer and stem cell therapies for degenerative diseases, today reported financial results and business highlights for the second quarter and six months ended June 30, 2017.

“In the first half of 2017, we made significant advancements in our dual technology platforms of immuno-oncology and stem cells,” commented Tony (Bizuo) Liu, CBMG’s Chief Executive Officer.  “In China we successfully launched two Phase I clinical trials for our anti-CD19 CAR-T product C-CAR011 and we expect to report topline clinical data from both trials by year-end. In the United States the development of AlloJoinTM, our “off-the-shelf” allogeneic adipose stem cell candidate, continues to progress with the recent $2.29 million award from California Institute for Regenerative Medicine (CIRM) to establish a cell line and IND filing in the treatment of Knee Osteoarthritis (KOA).” Mr. Liu further stated, “Upon completion of our new Shanghai GMP facility later this year, we believe we will have one of the largest cell therapy facilities in the world. The Shanghai facility will house our joint technology laboratory with GE Healthcare Life Sciences China to co-develop high-quality industrial control processes in CAR-T and stem cell manufacturing. With these recent advancements in our pipelines and validation of our GMP capabilities, we believe we will have the first mover advantage to deliver effective cell therapies in China. The recent unanimous U.S. FDA Advisory Committee approval of a large pharma’s Biological License Application (BLA) designated as Breakthrough Therapy on a CAR-T candidate for the treatment of relapsed/refractory B-cell acute lymphoblastic leukemia (ALL), and the FDA acceptance of another company’s diffuse large B-cell lymphoma (DLBCL) BLA filing under Priority Review, have set a precedent for a substantially shortened review clock for such breakthrough therapies in the United States. With both ALL and DLBCL in our pipeline, we are hopeful to see an analogous accelerated BLA review treatment in China when we are ready for our submission.”

Second Quarter and First Half 2017 Financial Performance

1. Cash Position: Cash and cash equivalents as of June 30, 2017 were $27.3 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 quarter and six months ended June 30, 2017 was $2.9 million and $7.8 million (offset by $1.2 million CIRM grant in Q2), respectively, compared to $5.2 million and $8.8 million for the same periods in 2016. 
3. G&A Expenses: General and administrative expenses for the quarter and six months ended June 30, 2017 were $3.3 million and $6.5 million, respectively, compared to $3.1 million and $5.8 million for the same periods in 2016.
4. R&D Expenses: Research and development expenses for the quarter and six months ended June 30, 2017 were $3.3 million and $6.4 million respectively, compared to $3.0 million and $5.4 million for the same periods in 2016.
5. Net Loss: Net loss allocable to common stock holders for the quarter and six months ended June 30, 2017 was $6.2 million and $12.4 million respectively, compared to $7.2 million and $11.4 million for the same periods in 2016.          

Recent Business Highlights First Half 2017

• Appointment of Michael A. Caligiuri, MD, current President of American Association for Cancer Research (AACR), as Chair of the External Advisory Board;
• Signed a strategic research collaboration agreement with GE Healthcare Life Sciences China to establish a joint technology laboratory in CBMG’s new Shanghai Zhangjiang GMP facility in order to co-develop control processes for the manufacture of CAR-T and stem cell therapies;
• Completed expansion of our 30,000 square foot facility in Huishan High Tech Park in Wuxi, China;
• Signed a ten-year lease of a 113,038 square feet building located in the “Pharma Valley” in Shanghai Zhangjiang High-Tech Park. The new GMP facility that will be built on these premises will consist of 40,000 square feet dedicated to advanced cell manufacturing.  

Clinical Developments First Half 2017

Immuno-Oncology Platform

• Commenced Phase I Trial (CALL-1) for C-CAR011 in adult patients with r/r B-cell ALL in China;
• Commenced patient enrollment in a new independent Phase I clinical trial of the Company’s ongoing CARD-1 study in patients with chemorefractory and aggressive DLBCL;
• Publication of an abstract exploring the application of B-cell antigen, CD20, for targeted Chimeric Antigen Receptor T cells (CAR-T) therapy, in conjunction with the 2017 American Society of Clinical Oncology (ASCO) Annual Meeting.

Stem Cell Platform

• 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 (haMPC) for the treatment of KOA in the United States.

About Cellular Biomedicine GroupCellular 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. 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									For the Six Months Ended
		June 30,									June 30,
			2017				2016					2017						2016
Net sales and revenue		$62,914				$71,599					$161,339						$560,090
Operating expenses:
Cost of sales			38,097				323,587					75,499						826,780
General and administrative			3,319,093				3,072,647					6,504,340						5,848,572
Selling and marketing			76,385				39,480					194,269						218,234
Research and development			3,349,509				2,972,855					6,393,634						5,371,217
Total operating expenses			6,783,084				6,408,569					13,167,742						12,264,803
Operating loss			(6,720,170	)			(6,336,970		)			(13,006,403		)				(11,704,713	)
Other income:
Interest income			40,573				18,290					89,755						35,340
Other income			476,079				7,646					553,587						23,966
Total other income			516,652				25,936					643,342						59,306
Loss before taxes			(6,203,518	)			(6,311,034		)			(12,363,061		)				(11,645,407	)
Income taxes credit (provision)			-				(886,248		)			(2,450		)				238,012
Net loss		$(6,203,518		)		$(7,197,282			)		$(12,365,511			)			$(11,407,395		)
Other comprehensive income (loss):
Cumulative translation adjustment			292,452				(271,438		)			346,121						(255,365	)
Unrealized gain (loss) on investments, net of tax			(240,000	)			(11,115,884		)			(240,000		)				5,300,633
Total other comprehensive income (loss):			52,452				(11,387,322		)			106,121						5,045,268
Comprehensive loss		$(6,151,066		)		$(18,584,604			)		$(12,259,390			)			$(6,362,127		)
Net loss per share:
Basic		$(0.43		)		$(0.52			)		$(0.87			)			$(0.89		)
Diluted		$(0.43		)		$(0.52			)		$(0.87			)			$(0.89		)
Weighted average common shares outstanding:
Basic			14,298,973				13,737,722					14,211,888						12,810,894
Diluted			14,298,973				13,737,722					14,211,888						12,810,894

CELLULAR BIOMEDICINE GROUP, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
		June 30,				December 31,
			2017				2016
Assets
Cash and cash equivalents		$27,298,445				$39,252,432
Accounts receivable, less allowance for doubtful amounts of $10,407
and $10,163 as of June 30, 2017 and December 31, 2016, respectively			91,462				39,974
Other receivables			1,014,721				412,727
Prepaid expenses			995,128				986,951
Total current assets			29,399,756				40,692,084
Investments			269,424				509,424
Property, plant and equipment, net			7,043,131				4,117,739
Goodwill			7,678,789				7,678,789
Intangibles, net			13,260,015				14,092,581
Long-term prepaid expenses and other assets			2,226,327				1,537,850
Total assets		$59,877,442				$68,628,467
Liabilities and Stockholders' Equity
Liabilities:
Accounts payable		$1,169,311				$216,154
Accrued expenses			592,582				1,168,787
Taxes payable			28,875				28,875
Deferred income			1,069,515				-
Other current liabilities			1,660,093				950,220
Total current liabilities			4,520,376				2,364,036
Other non-current liabilities			-				370,477
Total liabilities			4,520,376				2,734,513
Stockholders' equity:
Preferred stock, par value $.001, 50,000,000 shares
authorized; none issued and outstanding as of
June 30, 2017 and December 31, 2016, respectively			-				-
Common stock, par value $.001, 300,000,000 shares authorized;
14,336,474 and 14,281,378 issued; and 14,166,305 and 14,281,378 outstanding,
as of June 30, 2017 and December 31, 2016, respectively			14,336				14,281
Treasury stock at cost; 170,169 and nil shares of common stock
as of June 30, 2017 and December 31, 2016, respectively			(1,357,931	)			-
Additional paid in capital			155,623,430				152,543,052
Accumulated deficit			(97,912,198	)			(85,546,687	)
Accumulated other comprehensive income (loss)			(1,010,571	)			(1,116,692	)
Total stockholders' equity			55,357,066				65,893,954
Total liabilities and stockholders' equity		$59,877,442				$68,628,467

CELLULAR BIOMEDICINE GROUP, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
		For the Six Months Ended
		June 30,
			2017				2016
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss		$(12,365,511		)		$(11,407,395		)
Adjustments to reconcile net loss to net cash
used in operating activities:
Depreciation and amortization			1,369,168				1,349,137
Gain on disposal of assets			(49	)			-
Stock based compensation expense			2,902,113				2,412,261
Inventory provision			-				105,919
Allowance for doubtful account			-				10,782
Changes in operating assets and liabilities:
Accounts receivable			(50,557	)			275,333
Other receivables			(488,480	)			20,521
Inventory			-				(25,309	)
Prepaid expenses			13,246				(457,032	)
Taxes recoverable			-				150,082
Long-term prepaid expenses and other assets			(237,637	)			(259,624	)
Accounts payable			949,142				(124,531	)
Accrued expenses			(595,382	)			(387,695	)
Deferred income			1,069,515				-
Other current liabilities			35,542				(152,605	)
Taxes payable			-				30,000
Deferred tax liabilities			-				(242,267	)
Other non-current liabilities			(379,161	)			(50,049	)
Net cash used in operating activities			(7,778,051	)			(8,752,472	)
CASH FLOWS FROM INVESTING ACTIVITIES:
Proceeds from disposal of assets			286				-
Purchases of intangibles			(23,339	)			-
Purchases of assets			(3,014,055	)			(1,161,568	)
Net cash used in investing activities			(3,037,108	)			(1,161,568	)
CASH FLOWS FROM FINANCING ACTIVITIES:
Net proceeds from the issuance of common stock			-				42,437,374
Proceeds from exercise of stock options			73,779				175,399
Repurchase of treasury stock			(1,357,931	)			-
Net cash provided by financing activities			(1,284,152	)			42,612,773
EFFECT OF EXCHANGE RATE CHANGES ON CASH			145,324				(113,134	)
INCREASE IN CASH AND CASH EQUIVALENTS			(11,953,987	)			32,585,599
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD			39,252,432				14,884,597
CASH AND CASH EQUIVALENTS, END OF PERIOD		$27,298,445				$47,470,196

 

Contact:
Sarah Kelly 
Director of Corporate Communications, CBMG
+1 408-973-7884
sarah.kelly@cellbiomedgroup.com