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Cellular Biomedicine Group Reports Third Quarter Financial Results and Recent Operational Highlights

SHANGHAI, China and CUPERTINO, Calif., Nov. 09, 2017 (GLOBE NEWSWIRE) -- Cellular Biomedicine Group Inc. (NASDAQ:CBMG) (“CBMG” or the “Company”), a clinical-stage biopharmaceutical company engaged in the development of immunotherapies for cancer and effective stem cell therapies for degenerative diseases, today reported financial results and business highlights for the third quarter ended September 30, 2017.

“In line with our progress towards patient advocacy, recently we built out our new Shanghai facility, which we believe has one of the largest cell therapy capacities in the world. It houses the newly launched CBMG-GE Joint Laboratory of Cell Therapy and CBMG-Thermo Fisher Scientific Joint Innovation & Application Center. We believe the GE and Thermo Fisher strategic partnerships will further enhance our automation, efficiency and quality systems,” commented Tony (Bizuo) Liu, CBMG’s Chief Executive Officer. “We expect to release topline data readout from our Phase I clinical trials for CARD-1 and CALL-1 Chimeric Antigen Receptor (CAR) T-cell treatment for Diffuse Large B-Cell Lymphoma (DLBCL) and Acute Lymphoblastic Leukemia (ALL), and final data readout from our AlloJoin™ Phase I clinical trial for off-the-shelf Knee Osteoarthritis (KOA) therapy in China in the first half of 2018. And we remain optimistic that the U.S. FDA’s recent approval of certain CAR-T therapies for leukemia and lymphoma and last month’s China State Council’s guidelines on clinical trial reform will accelerate the review and approval process and migration to fast-track designation for credible and compliant CAR-T therapies in China, our addressable CAR-T market.”

Third Quarter 2017 Financial Performance

1. Cash Position: $16.3 million cash and cash equivalents as of September 30, 2017 as compared to $27.3 million as of June 30, 2017. In the third quarter of 2017 we used $11 million, which mainly comprised of $4 million for capital expenditure, $1 million in stock repurchase and $6 million for operations. We used $3.3 million for the same periods in 2016 for operations.
2. G&A Expenses: General and administrative expenses for the three months and nine months ended September 30, 2017 were $3.0 million and $9.5 million respectively, compared to $2.8 million and $8.6 million for the same periods in 2016.
3. R&D Expenses: Research and development expenses for the three months and nine months ended September 30, 2017 were $4.1 million and $10.5 million respectively, compared to $2.9 million and $8.3 million for the same periods in 2016.
4. Net Loss: Net loss allocable to common stock holders for the three months ended September 30, 2017 was $6.2 million, compared to $10.7 million for the same period in 2016. The decline in net loss mainly derived from the recognition of other than temporary impairment on stock investment of $4.6 million in 2016, which was one-off loss and there was no such case in 2017.

Business and Operational Highlights for the Third Quarter 2017 to date

  • Opened new Shanghai facility in “Pharma Valley” in Zhangjiang High-Tech Park
  • Established a strategic partnership with Thermo Fisher Scientific (China) Ltd. to build “CBMG-Thermo Fisher Scientific Joint Innovation & Application Center” in CBMG’s new Shanghai facility
  • Launched “CBMG-GE Joint Laboratory of Cell Therapy” with GE Healthcare Life Sciences China in CBMG’s new Shanghai facility

In the next 12 months, we aim to accomplish the following, though there can be no assurances that we will be able to accomplish these goals:

  • Confirm the safety and tolerability profile in an investigator-sponsored Phase I trial of C-CAR011 in China in refractory aggressive DLBCL and to initiate a larger Phase II clinical trial as soon as practicable;
  • Confirm the safety and tolerability profile in an investigator-sponsored phase I trial of C-CAR011 in relapsed and refractory (r/r) CD19+ B-cell Acute Lymphoblastic Leukemia (ALL) in China, and to prepare for a follow up multicenter Phase IIb trial;
  • Submit to the CFDA an IND package for C-CAR011 in treating patients with CD19+ B-cell malignancies;
  • Seek opportunities to file new CAR-T and other patents in China and potentially the rest of the world;
  • Continue to seek advanced technologies and partnerships to bolster our position in the CAR-T market in China;
  • Bolster R&D resources to fortify our intellectual properties portfolio and scientific development. Continue to develop a competitive Immuno-oncology pipeline for CBMG;
  • Assess the changes in the cell therapy competitive landscape and revise our corporate development strategy;
  • Complete Chemistry, Manufacturing and Controls (CMC), non-clinical and preclinical study data package to prepare for Allogeneic KOA IND filing in the United States;
  • Initiate clinical study to support the Biological License Application (BLA) for Allogeneic KOA study in the United States;
  • Bolster R&D resources to fortify our intellectual properties portfolio and scientific development;
  • Improve liquidity and fortify our balance sheet by courting institutional investors;
  • Evaluate new regenerative medicine technology platform for other indications and review recent development in the competitive landscape;
  • Explore new CAR-T opportunities for international collaboration and /or partnership;
  • Expand our cell manufacturing capacity and capabilities;
  • Evaluate the feasibility of sponsoring a multi-site Phase I/II NSCLC clinical study to support the Biological license application (BLA) for the U.S. and China CD40L GVAX trial in combination with anti-PD1;
  • Implement our GE Joint Technology Laboratory to develop control processes for the manufacture of CAR-T and Stem Cell Therapies;
  • Implement steps to advance our Thermo Fisher joint Cell Therapy Technology Innovation and Application Center; and
  • Elevate our corporate development strategy on maintaining the CAR-T and regenerative medicine dual technology platform.

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 currently has ongoing CAR-T Phase I clinical trials in China; CARD-1 for Diffuse Large B-cell Lymphoma (DLBCL) and Non-Hodgkin Lymphoma (NHL) and CALL-1 for adult Acute Lymphoblastic Leukemia (ALL), utilizing CBMG’s proprietary and optimized CD19 construct, as well as an ongoing Phase I trial in China for AlloJoin™ (CBMG’s “Off-the-Shelf” Allogeneic Human Adipose-derived Mesenchymal Stem Cell) for the treatment of Knee Osteoarthritis (KOA). 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 Nine Months Ended
September 30, September 30,
2017
2016
2017
2016
Net sales and revenue $ 106,787 $ 10,012 $ 268,126 $ 570,102
Operating expenses:
Cost of sales 55,294 9,128 130,793 835,908
General and administrative 3,023,390 2,790,305 9,527,730 8,638,877
Selling and marketing 85,742 124,143 280,011 342,377
Research and development 4,076,186 2,897,736 10,469,820 8,268,953
Impairment of investments - 4,611,714 - 4,611,714
Total operating expenses 7,240,612 10,433,026 20,408,354 22,697,829
Operating loss (7,133,825) (10,423,014) (20,140,228) (22,127,727)
Other income :
Interest income 23,933 22,338 113,688 57,678
Other income (expense) 907,678 (17,314) 1,461,265 6,652
Total other income 931,611 5,024 1,574,953 64,330
Loss before taxes (6,202,214) (10,417,990) (18,565,275) (22,063,397)
Income taxes provision - (243,230) (2,450) (5,218)
Net loss $ (6,202,214) $ (10,661,220) $ (18,567,725) $ (22,068,615)
Other comprehensive income (loss):
Cumulative translation adjustment 291,665 (58,824) 637,786 (314,189)
Unrealized gain (loss) on investments, net of tax - - (240,000) 5,300,633
Reclassification adjustments, net of tax, in connection with other-than-temporary impairment of investments - (5,557,939) - (5,557,939)
Total other comprehensive income (loss): 291,665 (5,616,763) 397,786 (571,495)
Comprehensive loss $ (5,910,549) $ (16,277,983) $ (18,169,939) $ (22,640,110)
Net loss per share :
Basic $ (0.43) $ (0.75) $ (1.30) $ (1.67)
Diluted $ (0.43) $ (0.75) $ (1.30) $ (1.67)
Weighted average common shares outstanding:
Basic 14,349,569 14,128,465 14,310,344 13,253,290
Diluted 14,349,569 14,128,465 14,310,344 13,253,290


CELLULAR BIOMEDICINE GROUP, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
September 30, December 31,
2017 2016
Assets
Cash and cash equivalents$16,292,031 $39,252,432
Accounts receivable, less allowance for doubtful amounts of $10,622
and $10,163 as of September 30, 2017 and December 31, 2016, respectively 145,384 39,974
Other receivables 935,106 412,727
Prepaid expenses 1,696,082 986,951
Total current assets 19,068,603 40,692,084
Investments 269,424 509,424
Property, plant and equipment, net 11,045,150 4,117,739
Goodwill 7,678,789 7,678,789
Intangibles, net 12,844,078 14,092,581
Long-term prepaid expenses and other assets 2,720,582 1,537,850
Total assets$53,626,626 $68,628,467
Liabilities and Stockholders' Equity
Liabilities:
Accounts payable$ 1,236,257 $ 216,154
Accrued expenses 728,908 1,168,787
Taxes payable 28,875 28,875
Deferred income 510,419 -
Other current liabilities 1,357,952 950,220
Total current liabilities 3,862,411 2,364,036
Other non-current liabilities - 370,477
Total liabilities 3,862,411 2,734,513
Commitments and Contingencies
Stockholders' equity:
Preferred stock, par value $.001, 50,000,000 shares
authorized; none issued and outstanding as of
September 30, 2017 and December 31, 2016, respectively - -
Common stock, par value $.001, 300,000,000 shares authorized;
14,375,506 and 14,281,378 issued; and 14,091,181 and 14,281,378 outstanding,
as of September 30, 2017 and December 31, 2016, respectively 14,376 14,281
Treasury stock at cost; 284,325 and nil shares of common stock
as of September 30, 2017 and December 31, 2016, respectively (2,443,122) -
Additional paid in capital 157,026,279 152,543,052
Accumulated deficit (104,114,412) (85,546,687)
Accumulated other comprehensive income (loss) (718,906) (1,116,692)
Total stockholders' equity 49,764,215 65,893,954
Total liabilities and stockholders' equity$ 53,626,626 $ 68,628,467


CELLULAR BIOMEDICINE GROUP, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
For the Nine Months Ended
September 30,
2017 2016
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss $(18,567,725) $(22,068,615)
Adjustments to reconcile net loss to net cash
used in operating activities:
Depreciation and amortization 2,125,391 2,034,411
Loss on disposal of assets 317 1,034
Stock based compensation expense 4,240,822 3,944,125
Other than temporary impairment on investments - 4,611,714
Inventory provision - 110,145
Allowance for doubtful account - 10,707
Changes in operating assets and liabilities:
Accounts receivable (103,701) 548,268
Other receivables (496,229) 1,275
Inventory - 33,398
Prepaid expenses (669,592) (307,924)
Taxes recoverable - 150,082
Long-term prepaid expenses and other assets (936,168) (376,214)
Accounts payable 1,012,693 (33,281)
Accrued expenses (475,274) (167,615)
Deferred income 510,419 -
Other current liabilities (206,196) (528,430)
Taxes payable - 30,000
Other non-current liabilities (386,504) (65,449)
Net cash used in operating activities (13,951,747) (12,072,369)
CASH FLOWS FROM INVESTING ACTIVITIES:
Proceeds from disposal of assets 286 -
Purchases of intangibles (23,562) (11,160)
Purchases of assets (6,978,348) (1,642,179)
Net cash used in investing activities (7,001,624) (1,653,339)
CASH FLOWS FROM FINANCING ACTIVITIES:
Net proceeds from the issuance of common stock - 42,437,374
Proceeds from exercise of stock options 232,910 685,712
Repurchase of treasury stock (2,443,122) -
Net cash provided by financing activities (2,210,212) 43,123,086
EFFECT OF EXCHANGE RATE CHANGES ON CASH 203,182 (166,089)
INCREASE IN CASH AND CASH EQUIVALENTS (22,960,401) 29,231,289
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD 39,252,432 14,884,597
CASH AND CASH EQUIVALENTS, END OF PERIOD $ 16,292,031 $ 44,115,886


Contacts:

Sarah Kelly
Director of Corporate Communications, CBMG

+1 408-973-7884
sarah.kelly@cellbiomedgroup.com

Source:Cellular Biomedicine Group Inc.