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Cellular Biomedicine Group Reports First Quarter 2015 Financial Results and Provides Business Highlights

PALO ALTO, Calif., May 18, 2015 (GLOBE NEWSWIRE) -- Cellular Biomedicine Group, Inc. (Nasdaq:CBMG) ("CBMG" or the "Company"), a biomedicine firm engaged in the development of effective stem cell therapies for degenerative diseases and immunotherapies for cancer, reported financial results for the first quarter ended March 31, 2015 and provided business highlights.

"I am very pleased with the progress that we have made thus far in 2015," said Dr. William (Wei) Cao, Chief Executive Officer of Cellular Biomedicine Group. "Our lead regenerative medicine candidate, ReJoinTM human adipose-derived mesenchymal progenitor cell (haMPC) therapy for Knee Osteoarthritis (KOA) continues to make excellent progress, with positive interim clinical data from the Phase IIb trial confirming observations from the Phase IIa trial. The engagement of Huntsworth Health to build a global KOL advocacy campaign for the clinical trials of ReJoinTM will serve to analyze and broaden awareness of our clinical data. We expect to complete Phase IIb 12 month patient follow-up by the fourth quarter of 2015. We also announced positive Phase I clinical data from our Chimeric Antigen Receptor T-cell (CAR-T) immuno-oncology clinical development programs, CD19 for Acute Lymphocytic Leukemia (B-cell ALL) and CD20 for Advanced Diffuse Large B Cell Lymphoma (DLBCL) and will present our Phase I clinical data of CD30 for Hodgkin's lymphoma at the upcoming World Stem Cells & Regenerative Medicine Congress in London on May 21, 2015. We continue to strengthen our research and development capability with our international-standard GMP facility in Shanghai, which passed its 4th consecutive CFDA inspection, and expect to slate our third GMP facility in Beijing with the recently signed lease for a 15,000 square feet site. The recent addition of two new members to our Scientific Advisory Board will further fortify our Stem Cell and Immuno-Oncology platforms as we continue to position Cellular Biomedicine Group as a leader in both stem cell and cancer immune cell technologies in China."

"Thus far in 2015, we have achieved many business milestones and continue to deliver value to our shareholders," commented Tony (Bizuo) Liu, Chief Financial Officer of the Company. "Our upgrade to the NASDAQ Global Market validates the strong positive momentum around our cell therapy platforms and our strict adherence to corporate governance. The expansion of our GMP facilities to Beijing will allow us to prepare for any increases in demand from our two cellular platforms in the near future. We closed a private placement transaction of approximately $19.6 Million, which strengthens the Company's cash position which will enable the Company to execute on its clinical milestones and to build a world-class biotechnology firm focused on providing solutions that address large unmet medical needs."

First Quarter 2015 Financial Performance

1. Cash Position: Cash and cash equivalents as of March 31, 2015 were $31.1 million compared to $14.8 million as of December 31, 2014

2. Net Cash Used in Operating Activities: Net cash used in operating activities for the first quarter of 2015 was $2.41 million, compared to $2.38 million for the same period in 2014

3. Revenue: Revenues in the first quarter of 2015 were $603,390 compared to $61,051 for the same period in 2014. The revenue in first quarter 2015 is solely comprised of sales from the technical services related to Agreen's Tcm Immunotherapy service while revenue for the same period of 2014 is derived from the sales of the A-Stromal™ enzyme reagent kits. We expect our biomedicine business to generate revenues primarily from immune therapy and the development of therapies for the treatment of KOA in the next three to four years.

4. G&A Expenses: General and administrative expenses for the first quarter of 2015 were $3.5 million compared to $1.4 million for the same period in 2014. Increased expenses in 2015 were associated with increased corporate activities related to the management and development of our biomedicine business, including:

  • An increase in stock-based compensation expense of $1.4 million, which primarily resulted from the new grants and higher fair value of unvested options after the Company listed on Nasdaq from June 2014 compared with those unvested options as of March 31, 2014;
  • An increase in depreciation and amortization of $187,000, which was mainly attributed to the patents obtained from the acquisition of AG in the third quarter of 2014;
  • An increase in payroll expenses of $166,000; and
  • An increase in legal, accounting and other professional services of $211,000.

5. R&D Expenses: Research and development expenses for the first quarter of 2015 were $734,484, compared to $498,147 for the same period a year ago. The increase was primarily attributable to the increase of the Company's immunotherapy research and development team, which resulted in an increase in payroll expenses and an increase in rental expenses.

6. Net Loss: Net loss allocable to common stock holders was $4.3 million, compared to $446,531 for the same period in 2014. Changes in net loss are primarily attributable to changes in operations of the biomedicine segment and the discontinuation of the consulting segment.

Business Highlights of 2015 To Date

  • Upgraded the listing of the Company's securities from the NASDAQ Capital Market to the NASDAQ Global Market
  • Closed a private placement transaction under which it sold an aggregate of 515,789 shares of the Company's common stock to select private investors for total gross proceeds of approximately $19.6 million
  • Acquired Chinese PLA General Hospital's Chimeric Antigen Receptor T cell (CAR-T) therapy, its recombinant expression vector CD19, CD20, CD30 and Human Epidermal Growth Factor Receptor's (EGFR or HER1) Immuno-Oncology patents (all pending), and Phase I/II clinical data of the aforementioned therapies and manufacturing knowledge
  • Shanghai facility passed its 4th consecutive CFDA inspection, adhering to more than 1000 Standard Operating Procedures (SOPs) for operation and quality management
  • Signed a lease for a 15,000 square feet site in Beijing slated for the Company's third GMP facility, with completion expected in Q3 2015
  • Engaged Huntsworth Health, a global healthcare marketing and communications agency to build a global KOL advocacy campaign for the Company's ReJoinTM human adipose-derived mesenchymal progenitor cell (haMPC) clinical trials for the treatment of Knee Osteoarthritis
  • Hosted "Advancing Solutions to Cancerous and Degenerative Straits" open house and tour at the Company's Shanghai GMP facility
  • Appointed two members to the newly established Scientific Advisory Board to advise the Company on immuno-oncology and stem cell technology and its applications

Technology Achievements of 2015 To Date

  • Released interim 24-week clinical data from the Phase IIb trial of the Company's ReJoinTM human adipose-derived mesenchymal progenitor cell (haMPC) therapy for Knee Osteoarthritis (KOA)
  • Released clinical data from its CAR-T immuno-oncology clinical development programs, CD19 for Acute Lymphocytic Leukemia (B-cell ALL) and CD20 for Advanced Diffuse Large B Cell Lymphoma (DLBCL)
  • Initiated patient recruitment to support a study of ReJoinTM human adipose derived mesenchymal progenitor cell (haMPC) therapy for Cartilage Damage (CD) resulting from osteoarthritis (OA) or sports injury

Upcoming Events

Management plans to participate in the following upcoming industry and investor conferences:

  • May 20-22, 10th Annual World Stem Cells & Regenerative Medicine Congress, London, UK
  • June 1-4, Jefferies 2015 Global Healthcare Conference, New York, USA

About Cellular Biomedicine Group

Cellular Biomedicine Group, Inc. develops proprietary cell therapies for the treatment of certain degenerative diseases and cancers. Our developmental stem cell, progenitor cell, and immune cell projects are the result of research and development by scientists and doctors from China and the United States. Our flagship GMP facility in China, consisting of eight independent cell production lines, is designed, certified and managed according to U.S. 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, but are not limited to, risk factors inherent in doing business. 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 BALANCE SHEETS
(UNAUDITED)
March 31, December 31,
2015 2014
Assets
Cash and cash equivalents $31,144,667 $14,770,584
Accounts receivable 339,973 141,029
Other receivables 190,919 135,957
Inventory 277,868 372,249
Prepaid expenses 641,906 565,299
Other current assets -- 110,347
Total current assets 32,595,333 16,095,465
Investments 4,187,676 6,886,033
Property, plant and equipment, net 1,382,983 1,280,410
Goodwill 7,678,789 7,678,789
Intangibles, net 10,868,067 11,156,676
Long-term prepaid expenses and other assets 1,226,054 587,729
Total assets $57,938,902 $43,685,102
Liabilities and Stockholders' Equity
Liabilities:
Accounts payable $160,174 $426,917
Accrued expenses 2,216,612 2,074,384
Taxes payable 588,233 814,288
Advances payable to related party -- 36,254
Other current liabilities 2,066,895 724,479
Total current liabilities 5,031,914 4,076,322
Other non-current liabilities 239,328 452,689
Total liabilities 5,271,242 4,529,011
Commitments and Contingencies
Stockholders' equity:
Preferred stock, par value $.001, 50,000,000 shares
authorized; none issued and outstanding as of
March 31, 2015 and December 31, 2014, respectively -- --
Common stock, par value $.001, 300,000,000 shares authorized;
11,514,021 and 10,990,335 issued and outstanding
as of March 31, 2015 and December 31, 2014, respectively 11,514 10,990
Additional paid in capital 95,814,194 75,467,316
Accumulated deficit (42,177,761) (37,890,590)
Accumulated other comprehensive income (loss) (980,287) 1,568,375
Total stockholders' equity 52,667,660 39,156,091
Total liabilities and stockholders' equity $57,938,902 $43,685,102
CELLULAR BIOMEDICINE GROUP, INC.
CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS AND COMPREHENSIVE LOSS
(UNAUDITED)
For the Three Months Ended
March 31,
2015 2014
Net sales and revenue $603,390 $61,051
Operating expenses:
Cost of sales 458,984 40,600
General and administrative 3,483,866 1,382,513
Selling and marketing 101,407 21,359
Research and development 734,484 498,147
Impairment of investments 123,428 --
Total operating expenses 4,902,169 1,942,619
Operating loss (4,298,779) (1,881,568)
Other income (expense):
Interest income 15,111 225
Other income (expense) (2,703) 20,137
Total other income 12,408 20,362
Loss from continuing operations before taxes (4,286,371) (1,861,206)
Income taxes provision (800) --
Loss from continuing operations (4,287,171) (1,861,206)
Profit on discontinued operations, net of taxes -- 1,414,675
Net loss $(4,287,171) $(446,531)
Other comprehensive income (loss):
Cumulative translation adjustment 19,609 (11,813)
Unrecognized loss on investments (2,568,271) (521,448)
Total other comprehensive loss: (2,548,662) (533,261)
Comprehensive loss $(6,835,833) $(979,792)
Loss per share for continuing operations:
Basic $(0.39) $(0.25)
Diluted $(0.39) $(0.25)
Earnings per share for discontinued operations:
Basic $-- $0.19
Diluted $-- $0.19
Net loss per share :
Basic $(0.39) $(0.06)
Diluted $(0.39) $(0.06)
Weighted average common shares outstanding:
Basic 11,039,208 7,494,815
Diluted 11,039,208 7,494,815
CELLULAR BIOMEDICINE GROUP, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
For the Three Months Ended
March 31,
2015 2014
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss $(4,287,171) $(446,531)
Adjustments to reconcile net loss to net cash
used in operating activities:
Depreciation and amortization 439,242 217,064
Loss on disposal of assets -- 12,313
Stock based compensation expense 1,719,458 279,445
Amortization of deferred stock compensation -- 35,358
Other than temporary impairment on investments 123,428 --
Realized losses from sale of investments 5,178 5,203
Value of stock received for services -- (1,610,000)
Changes in operating assets and liabilities:
Accounts receivable (198,944) (24,000)
Other receivables (38,463) (72,382)
Inventory 94,381 (14,570)
Prepaid expenses (81,602) (120,425)
Other current assets 110,346 3,357
Investments -- 5,200
Long-term prepaid expenses and other assets (44,340) (300,186)
Accounts payable (266,744) (36,524)
Accrued expenses 142,276 (217,100)
Advances payable to related party (30,216) --
Other current liabilities 346,585 (95,567)
Taxes payable (226,055) --
Other non-current liabilities (213,254) --
Net cash used in operating activities (2,405,895) (2,379,345)
CASH FLOWS FROM INVESTING ACTIVITIES:
Proceed from sale of investments, net of issuance cost paid 1,480 --
Purchases of intangibles (569,828) --
Purchases of assets (179,293) (19,342)
Net cash used in investing activities (747,641) (19,342)
CASH FLOWS FROM FINANCING ACTIVITIES:
Net proceeds from the issuance of common stock 19,564,846 1,221,980
Proceeds from exercise of stock options 26,590 --
Repayment of advance from affiliate -- (33,457)
Net cash provided by financing activities 19,591,436 1,188,523
EFFECT OF EXCHANGE RATE CHANGES ON CASH (63,817) (7,747)
INCREASE/(DECREASE) IN CASH AND CASH EQUIVALENTS 16,374,083 (1,217,911)
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD 14,770,584 7,175,215
CASH AND CASH EQUIVALENTS, END OF PERIOD $31,144,667 $5,957,304
SUPPLEMENTAL CASH FLOW INFORMATION
Cash paid for income taxes $(226,855) $--

CONTACT: Sarah Kelly Director of Corporate Communications, CBMG +1 650 566-5064 sarah.kelly@cellbiomedgroup.com Vivian Chen Managing Director Investor Relations, Grayling +1 347 481-3711 vivian.chen@grayling.com

Source:Cellular Biomedicine Group Inc.