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20-Feb-2019

Cellular Biomedicine Group Reports Fourth Quarter and Full Year 2018 Financial Results and Recent Operational Progress

SHANGHAI and NEW YORK, Feb. 19, 2019 /PRNewswire/ -- Cellular Biomedicine Group, Inc. (NASDAQ: CBMG) (CBMG or the Company), a biopharmaceutical firm engaged in the drug development of immunotherapies for cancer and stem cell therapies for degenerative diseases, reported business highlights and financial results for the fourth quarter and full year ended December 31, 2018.

"2018 was a stellar year for CBMG. The licensing and collaboration agreement with Novartis reaffirmed our position in the cell therapy industry. We continue to focus on our goal to bring  safe and effective  cell-therapies to patients with unmet medical needs.  We are diligently advancing our pipeline in 2019 and expanding into solid tumors with α-fetoprotein T-cell receptors (AFP-TCR)  and tumor infiltrating lymphocyte (TIL) technologies.  We have a robust pipeline that spans across 8 different modalities," said Tony Liu, CEO of CBMG. "We expanded our senior leadership team with the hiring of Dr. Michael Humphries, a seasoned drug developer from Novartis, and Derrick Li, former Managing Director in the healthcare investment banking group at B. Riley FBR.  We were privileged to have Dr. Stephan Grupp join our Scientific Advisory Board. 2019 will be a busy year. In January we  announced the initiation of our B-cell maturation antigen (BCMA) clinical trial. Besides the AFP-TCR and TIL solid tumor platform, in 2019 we plan to initiate clinical development for CAR-T programs for CD22, CD20 and NKG2D for hematological cancers, and AFP TCR-T for metastatic HCC." 

Recent Highlights
COLLABORATION AND LICENSING AGREEMENT WITH NOVARTIS ON KYMRIAH® – We signed a strategic licensing and collaboration agreement with Novartis to manufacture and supply the CAR-T cell therapy Kymriah® (tisagenlecleucel) in China (*Kymriah® is a registered trademark of Novartis AG). CBMG licensed certain proprietary technology to Novartis for global use.

  • NCI PATENT LICENSE FOR NEXT GENERATION TIL TECHNOLOGY TO TREAT SOLID TUMORS – We have licensed patents from the National Cancer Institute (NCI), an institute of the National Institutes of Health (NIH), to develop, manufacture and commercialize next generation neoantigen-reactive TIL technology to treat solid tumors.
  • OPENING OF GLOBAL RESEARCH AND DEVELOPMENT CENTER IN MARYLAND – We expanded our research and development resources with a new center in Gaithersburg, Maryland.
  • POSITIVE PHASE I CLINICAL DATA ON ALLOJOIN® FOR KNEE OSTEOARTHRITIS (KOA) – In March 2018, we released promising results of our Phase I Human Adipose-Derived Mesenchymal Progenitor Cells (haMPC) clinical trial for Knee Osteoarthritis. The 48-week analysis of study data of 22 patients demonstrated AlloJoin®, off-the-shelf allogeneic stem cell therapy for KOA, to have good safety tolerance and early signs of efficacy in preventing cartilage deterioration. The total Western Ontario and McMaster Universities Osteoarthritis Index (WOMAC) scores (consisting of pain, stiffness and function scores of joints) as a primary end point showed a significant improvement at 12 weeks post AlloJoin® cell therapy and continued improvement at 48 weeks. The secondary evaluation end point, the data of 3D spoiled gradient-recalled echo (SPGR) quantitative magnetic resonance imaging (MRI) for whole knee cartilage volume at 48 weeks showed an increased tendency when compared with that at baseline 0 weeks, and as compared with normal cartilage deterioration as a result of aging. Using this clinical package, our IND submission with China's National Medical Products Administration (NMPA) recently received unprecedented approval to move forward with a Phase II clinical trial in off-the-shelf allogeneic stem cell therapy for KOA.
  • STRATEGIC INVESTMENTS – We received two investments from:
  • (a) Sailing Capital, a global private equity firm focused on China cross-border in disruptive global companies in the healthcare, technology and consumer sectors, invested $30.6 million; and
  • (b) Novartis, as part of our collaboration, includes a $40 million equity investment in CBMG.
  • FORTIFIED OUR CLINICAL AND MEDICAL LEADERSHIP – Dr. Humphries, a seasoned pharmaceutical executive with over 28 year of experience in clinical research, regulatory affairs, drug safety and medical affairs in China in all therapy areas, joined us from Novartis China. Dr. Humphries has contributed to a total of 56 New Drug Application (NDA) approvals in China. He has held adjunct professor teaching positions at both Hong Kong University and the Chinese University of Hong Kong in internal medicine. Dr. Humphries previously held a number of leadership and technical positions with Novartis China, GlaxoSmithKline – GSK China/Hong Kong, and Roche Pharmaceuticals.
  • REVAMPED & AUGMENTED INVESTOR RELATIONS, FOR INCREASED VISIBILITY  WITH INSTITUTIONAL INVESTORS – Mr. Derrick Li, a seasoned healthcare investment banker joined CBMG from B. Riley FBR, where he served as Managing Director in its healthcare investment-banking group. Mr. Li previously was a Co-Founder and Managing Director at TPP Healthcare and was an Equity Analyst at the Royce Funds. Mr. Li has substantially improved and institutionalized our communications with the Street.
  • APPOINTMENT OF DR. STEPHAN GRUPP TO SCIENTIFIC ADVISORY BOARD –Dr. Grupp, a Professor of Pediatrics and the University of Pennsylvania Perelman School of Medicine, is a CAR-T pioneer and pediatric oncologist. Dr. Grupp is the Chief of Section – Cellular Therapy and Transplant in the Oncology Division at The Children's Hospital of Philadelphia (CHOP) where he has researched and led clinical trials of CD19 directed CAR-T cell therapy for children with acute lymphoblastic leukemia (ALL). Dr. Grupp also serves as Medical Director of the Stem Cell Laboratory at CHOP and has been an attending physician and oncology researcher at CHOP since 1996.

2019 Anticipated Immuno-Oncology Key Milestones

  • Initiation of an investigator-led Phase I clinical study of CD22 targeting relapsed CD19 ALL patients
  • Initiation of an investigator-led Phase I clinical study of CD20 targeting relapsed CD19 Non-Hodgkin lymphoma (NHL) patients
  • Initiation of an investigator-led Phase I clinical study of NKG2D targeting acute myeloid leukemia (AML) patients
  • Initiation of a Phase I clinical study of AFP-TCR for Hepatocellular carcinoma (HCC) in the U.S. and in China
  • Initiation of a Phase I clinical study of TIL in Non-small-cell lung carcinoma (NSCLC) in the U.S. and in China
  • Presentation of BCMA clinical data from the ongoing BCMA clinical study in patients with MM by end of 2019

Fourth Quarter and Full Year 2018 Financial Results

  • Cash Position: Cash, cash equivalents and marketable securities as of December 31, 2018 were $52.8 million, compared to $21.6 million as of December 31, 2017, an increase of $31.2 million, which was primarily driven by the Sailing Capital and Novartis investments.
  • Revenues: We received de minims incidental fees for service while focusing our resources on our drug development activities.
  • R&D Expenses: Research and development expenses were $24.2 million for 2018 as compared to $14.6 million for 2017. The increase in research and development expenses was driven by costs incurred to advance and expand our pipeline and is primarily attributable to increased clinical trial-related costs and manufacturing costs for our development programs, as well as increased employee-related costs due to headcount growth supporting overall research and development activities.
  • G&A Expenses: General and administrative expenses were $13.2 million for 2018 as compared to $12.8 million for 2017, primarily attributed to growth-related expenses. 
  • Net Loss: Net loss was $38.9 million for 2018 as compared to $25.5 million for 2017.

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 12 independent cell production lines, are designed and managed according to both China and U.S. GMP standards.  Our Shanghai facility includes a "Joint Laboratory of Cell Therapy" with GE Healthcare and a "Joint Cell Therapy Technology Innovation and Application Center" with Thermo Fisher Scientific, whose partnerships focus on improving manufacturing processes for cell therapies. The CBMG pipeline includes preclinical compounds targeting CD20-, CD22- and B-cell maturation antigen (BCMA)-specific CAR-T compounds, and T-cell receptor (TCR) and tumor infiltrating lymphocyte (TIL) technologies. A Phase IIb trial in China for Rejoin®  autologous Human Adipose-derived Mesenchymal Progenitor Cell (haMPC) for the treatment of Knee Osteoarthritis (KOA) as well as a Phase I trial in China for AlloJoin™ (CBMG's "Off-the-Shelf" haMPC) for the treatment of KOA are ongoing. CBMG is included in the broad-market Russell 3000® Index and the small-cap Russell 2000® Index, and the Loncar China BioPharma index. 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 and 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 those regarding our ability to implement our plans, strategies and objectives for future operations, including regulatory approval of our IND applications, our plan to configure part of our Shanghai facility with GE Healthcare's FlexFactory platform, our ability to execute on our obligations under the terms of our licensing and collaboration arrangement with Novartis, our ability to execute on proposed new products, services or development thereof, results of our clinical research and development, regulatory infrastructure governing cell therapy and cellular biopharmaceuticals, our ability to enter into agreements with any necessary manufacturing, marketing and/or distribution partners for purposes of commercialization, our ability to seek intellectual property rights for our product candidates, competition in the industry in which we operate, overall market conditions, any statements or assumptions underlying any of the foregoing 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, it 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.

 CONSOLIDATED STATEMENT OF OPERATIONS AND COMPREHENSIVE LOSS

















For the Year Ended
December 31,



2018


2017


2016








Net sales and revenue


$224,403


$336,817


$627,930








Operating expenses:







Cost of sales


135,761


162,218


860,417

General and administrative


13,220,757


12,780,483


11,670,506

Selling and marketing


308,830


360,766


425,040

Research and development


24,150,480


14,609,917


11,475,587

Impairment on non-current assets


2,914,320


-


4,611,714

         Total operating expenses


40,730,148


27,913,384


29,043,264

Operating loss


(40,505,745)


(27,576,567)


(28,415,334)








Other income:







Interest income


392,328


133,621


78,943

Other income


1,172,879


1,955,086


132,108

        Total other income


1,565,207


2,088,707


211,051

Loss before taxes


(38,940,538)


(25,487,860)


(28,204,283)








Income taxes provision


(4,954)


(2,450)


(4,093)















Net loss


$(38,945,492)


$(25,490,310)


$(28,208,376)

Other comprehensive income (loss):







Cumulative translation adjustment


(1,079,689)


967,189


(743,271)

   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)

Total other comprehensive income (loss):


(1,079,689)


727,189


(1,000,577)








Comprehensive loss


$(40,025,181)


$(24,763,121)


$(29,208,953)








Net loss per share:







  Basic and diluted


$(2.20)


$(1.78)


$(2.09)








Weighted average common shares outstanding:







  Basic and diluted


17,741,104


14,345,604


13,507,408

 

CELLULAR BIOMEDICINE GROUP, INC.

 CONSOLIDATED BALANCE SHEETS







December 31,


December 31,


2018


2017





 Assets




Cash and cash equivalents

$52,812,880


$21,568,422

Accounts receivable, less allowance for doubtful amounts of $94,868 and $10,789 as of December 31, 2018 and December 31, 2017, respectively

787


202,887

Other receivables

101,909


170,842

Prepaid expenses

1,692,135


1,852,695

Total current assets

54,607,711


23,794,846





Investments

240,000


269,424

Property, plant and equipment, net

15,193,761


12,973,342

Goodwill

7,678,789


7,678,789

Intangibles, net

7,970,692


12,419,692

Long-term prepaid expenses and other assets

5,952,193


4,026,203

Total assets

$91,643,146


$61,162,296





Liabilities and Stockholders' Equity








Liabilities:




Accounts payable

$422,752


$225,287

Accrued expenses

1,878,926


1,097,327

Taxes payable

28,950


28,875

Other current liabilities

3,836,308


2,324,632

Total current liabilities

6,166,936


3,676,121





Other non-current liabilities

257,818


183,649

Total liabilities

6,424,754


3,859,770









    Preferred stock, par value $.001, 50,000,000 shares authorized; none issued and outstanding as of December 31, 2018 and 2017, respectively

-


-





    Common stock, par value $.001, 300,000,000 shares authorized;19,120,781 and 15,615,558 issued; and 18,119,282 and 15,188,764 outstanding, as of December 31, 2018 and 2017, respectively

19,121


15,616

   Treasury stock at cost; 1,001,499 and 426,794 shares of common stock as of December 31, 2018 and December 31, 2017, respectively

(13,953,666)


(3,977,929)

Additional paid in capital

250,604,618


172,691,339

    Accumulated deficit

(149,982,489)


(111,036,997)

    Accumulated other comprehensive loss

(1,469,192)


(389,503)

Total stockholders' equity

85,218,392


57,302,526





Total liabilities and stockholders' equity

$91,643,146


$61,162,296

 

CELLULAR BIOMEDICINE GROUP, INC.

 CONSOLIDATED STATEMENTS OF CASH FLOWS










For the Year Ended



December 31,



2018


2017


2016






CASH FLOWS FROM OPERATING ACTIVITIES:







  Net loss


$(38,945,492)


$(25,490,310)


$(28,208,376)

  Adjustments to reconcile net loss to net cash







     used in operating activities:







Depreciation and amortization


5,049,523


2,985,963


2,635,001

Loss on disposal of assets


4,957


317


2,156

Stock based compensation expense


4,826,745


5,345,211


5,452,417

Other than temporary impairment on investments


29,424


-


4,611,714

Impairment on intangible assets


2,884,896


-


-

Interest from six-month deposits with the banks


(175,479)


-


-

Reversal of inventory provision


-


-


(115,391)

Allowance for doubtful account


84,622


-


10,163

  Changes in operating assets and liabilities:







Accounts receivable


107,263


(160,628)


537,155

Other receivables


66,108


(467,985)


(156,672)

Inventory


-


-


514,734

Prepaid expenses


68,435


(812,675)


(669,598)

Taxes recoverable


-


-


150,082

Long-term prepaid expenses and other assets


(538,349)


(1,005,029)


(643,673)

Accounts payable


133,740


(814)


(28,205)

Accrued expenses


816,936


(118,968)


356,420

Other current liabilities


390,181


1,339,866


(640,573)

Taxes payable


75


-


28,875

Other non-current liabilities


83,416


(208,340)


296,036

          Net cash used in operating activities


(25,112,999)


(18,593,392)


(15,867,735)








CASH FLOWS FROM INVESTING ACTIVITIES:







   Proceeds from disposal of assets


1,625


-


-

   Withdrawing six-month deposits with the banks


10,175,479


-


-

   Putting six-month deposits with the banks


(10,000,000)


-


-

Purchases of intangible assets


(196,836)


(23,734)


(56,519)

Purchases of property, plant and equipment


(6,589,493)


(10,169,134)


(2,676,888)

          Net cash used in investing activities


(6,609,225)


(10,192,868)


(2,733,407)








CASH FLOWS FROM FINANCING ACTIVITIES:







Net proceeds from the issuance of common stock


70,351,173


14,496,040


42,399,874

Proceeds from exercise of stock options


2,738,866


308,371


885,680

Repurchase of treasury stock


(9,975,737)


(3,977,929)


-

          Net cash provided by financing activities


63,114,302


10,826,482


43,285,554








EFFECT OF EXCHANGE RATE CHANGES ON CASH


(147,620)


275,768


(316,577)








INCREASE IN CASH AND CASH EQUIVALENTS


31,244,458


(17,684,010)


24,367,835

CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD


21,568,422


39,252,432


14,884,597

CASH AND CASH EQUIVALENTS, END OF PERIOD


$52,812,880


$21,568,422


$39,252,432








SUPPLEMENTAL CASH FLOW INFORMATION














Cash paid for income taxes


$4,879


$2,450


$6,705

Contact:
Derrick C. Li
Head of Strategy and Investor Relations, CBMG
+1 917 717 0994
derrick.li@cellbiomedgroup.com

 

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SOURCE Cellular Biomedicine Group

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Last Updated: 20-Feb-2019