Cellular Biomedicine Group today reported business highlights and financial results for the full year
“2016 was a pivotal year for Cellular Biomedicine Group which resulted in the Company’s ability to advance our immuno-oncology program with a new Phase I CAR-T clinical trial for the treatment of patients with refractory Diffuse Large B-Cell Lymphoma (DLBCL) while reporting promising interim safety data from our AlloJoinTM allogeneic haMPC therapy for the treatment of Knee Osteoarthritis (KOA) in China,” commented Tony (Bizuo) Liu, Chief Executive Officer of CBMG. “We continue to build momentum in 2017 with the announcement of our second Phase I CAR-T clinical trial for the treatment of adult patients with relapsed or refractory CD19+ B-cell Acute Lymphoblastic Leukemia (ALL) utilizing CBMG’s proprietary and optimized CD19 construct. In addition, CBMG was also awarded $2.29 million from the California Institute for Regenerative Medicine (CIRM) to support pre-clinical studies of AlloJoinTM in the U.S., which bolsters our confidence in the resources we have dedicated to the development of an off-the-shelf stem cell product and validates the previous clinical trials we have conducted in China. Our endeavor in the U.S. market will further strengthen our commercialization pipeline.
“We look forward to an exciting 2017 as we are competitively well positioned with the financial resources and talent to meet our key operational objectives, beginning with the completion of the new Shanghai and expanded Wuxi facilities, which, combined with our Beijing facility will total 70,000 square feet of GMP facilities across three key cities in China. This uniquely equips us with an in-house integrated Chemistry, Manufacturing, and Controls (CMC) process of predominately closed and automated systems for clinical grade CAR-T cells, plasmid and viral vectors bank production. These state-of-the-art facilities with strong quality assurance will have the capacity to support product commercialization to treat approximately 10,000 cancer patients and 10,000 stem cell patients per year. We believe our genetically engineered CAR-T technology will effectively turn a patient's own blood cells into cancer killers and look forward to publishing data from our DLBCL and ALL Phase I trials in the fourth quarter of 2017. Given the CFDA’s imminent publication of its cell therapy regulation, one can reasonably expect that cancer patients may benefit from our clinical trial endeavors as early as 2019. We expect to increase our research and development hiring and spending as we commence additional CAR-T trials in China. We will continue to invest in new technologies and collaborate with world-leading research institutions in order to strengthen our innovative pipelines and move our clinical assets into later stage clinical development which have the potential to address large unmet medical needs especially in cancer.”
2016 and Recent Clinical Developments
Immuno-Oncology Platform
- Commenced patient enrollment in China for its CARD-1 (“CAR-T Against DLBCL”) Phase I clinical trial utilizing CBMG’s optimized proprietary C-CAR011 construct of CD19 chimeric antigen receptor T-cell (CAR-T) therapy for the treatment of patients with refractory Diffuse Large B-cell Lymphoma (DLBCL);
- Commenced patient enrollment in China for its CALL-1 (“CAR-T against Acute Lymphoblastic Leukemia”) Phase I clinical trial utilizing CBMG’s optimized proprietary C-CAR011 construct of CD19 chimeric antigen receptor T-cell (CAR-T) therapy for the treatment of adult patients with relapsed or refractory (r/r) CD19+ B-cell Acute Lymphoblastic Leukemia (ALL).
Stem Cell Platform
- Announced encouraging 48-week clinical data from the Phase IIb trial of its ReJoin® haMPC therapy for Knee Osteoarthritis (KOA), revealing increase of patient’s knee cartilage volume and relief of pain;
- Launched an investigator initiated Phase I clinical trial of an off-the-shelf allogeneic adipose-derived haMPC AlloJoinTM therapy for KOA patients in China;
- Reported three-month interim analysis of AlloJoinTM demonstrating a safety and tolerability profile with no serious adverse events (SAE) observed.
2016 and Recent 2017 Corporate Highlights
- Expanded the Company’s cell manufacturing capabilities with the lease of a 113,038 square foot building located in the “Pharma Valley” in Shanghai Zhangjiang High-Tech Park;
- The new GMP facility will consist of approximately 43,000 square feet dedicated to advanced cell manufacturing; - 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;
- Advanced the Company’s cash position with an investment from Wuhan Dangdai Science & Technology Industries Group Inc. of $43.13 million for 2.27 million shares of the Company’s common stock.
Full Year 2016 Financial Results
Cash Position: The Company had working capital of $38.3 million as of December 31, 2016 compared to $13.7 million as of December 31, 2015. Cash position increased to $39.3 million at December 31, 2016 compared to $14.9 million at December 31, 2015, due to an increase in cash generated from financing activities of a private placement in 2016 for aggregate net proceeds of approximately $42.4 million, partially offset by an increase in cash used in operating and investing activities.
Net Cash Used in Operating Activities: Full-year 2016 net cash used in operating activities was $15.9 million compared to $11.8 million in 2015. The change in operating assets and liabilities was primarily due to an increase in prepaid expenses and long-term prepaid expenses, net of the decrease in accounts receivable and inventory.
Revenue: Full-year 2016 revenue was $0.6 million compared to $2.5 million in 2015. All revenue for the year ended December 31, 2016 was derived from cell therapy technology services. The drop in revenue mainly resulted from (i) the reprioritization of the Company efforts on developing CAR-T clinical trials instead of cell therapy technology services and (ii) impairment of certain legacy investments.
G&A Expenses: Full-year 2016 general and administrative expenses were $11.7 million compared to $13.1 million in 2015. Decreased expenses in 2016 were primarily attributed to a decrease in stock-based compensation expense of $1.8 million.
R&D Expenses: Full-year 2016 research and development expenses were $11.5 million compared to $7.6 million in 2015. The increase was primarily attributed to our continued investment in hiring top scientists to boost our near-term and long-term research, product development, and cell production process capabilities for CAR-T. Our R&D headcount increased from 47 in December 31, 2015 to 81 at year-end of 2016 as result of this effort.
Net Loss: Full-year 2016 net loss allocable to common stock holders was $28.2 million compared to $19.4 million in 2015. Changes in net loss were primarily attributable to changes mentioned above.
About Cellular Biomedicine Group (CBMG)
Cellular Biomedicine Group, Inc. 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.
| CELLULAR BIOMEDICINE GROUP, INC. | ||||||||||||||||
| CONSOLIDATED STATEMENT OF OPERATIONS AND COMPREHENSIVE LOSS | ||||||||||||||||
| For the Year Ended December 31, |
||||||||||||||||
| 2016 | 2015 | 2014 | ||||||||||||||
| Net sales and revenue | $ | 627,930 | $ | 2,505,423 | $ | 564,377 | ||||||||||
| Operating expenses: | ||||||||||||||||
| Cost of sales | 860,417 | 1,880,331 | 242,215 | |||||||||||||
| General and administrative | 11,670,506 | 13,068,255 | 7,875,413 | |||||||||||||
| Selling and marketing | 425,040 | 709,151 | 314,894 | |||||||||||||
| Research and development | 11,475,587 | 7,573,228 | 3,146,499 | |||||||||||||
| Impairment of investments | 4,611,714 | 123,428 | 1,427,840 | |||||||||||||
| Total operating expenses | 29,043,264 | 23,354,393 | 13,006,861 | |||||||||||||
| Operating loss | (28,415,334 | ) | (20,848,970 | ) | (12,442,484 | ) | ||||||||||
| Other income: | ||||||||||||||||
| Interest income | 78,943 | 42,220 | 15,043 | |||||||||||||
| Other income | 132,108 | 630,428 | 71,982 | |||||||||||||
| Total other income | 211,051 | 672,648 | 87,025 | |||||||||||||
| Loss from continuing operations before taxes | (28,204,283 | ) | (20,176,322 | ) | (12,355,459 | ) | ||||||||||
| Income taxes (expenses) credit | (4,093 | ) | 728,601 | - | ||||||||||||
| Loss from continuing operations | (28,208,376 | ) | (19,447,721 | ) | (12,355,459 | ) | ||||||||||
| Loss on discontinued operations, net of taxes | - | - | (3,119,152 | ) | ||||||||||||
| Net loss | $ | (28,208,376 | ) | $ | (19,447,721 | ) | $ | (15,474,611 | ) | |||||||
| Other comprehensive income (loss): | ||||||||||||||||
| Cumulative translation adjustment | (743,271 | ) | (307,950 | ) | 15,254 | |||||||||||
| Unrealized gain (loss) on investments, net of tax | 5,300,633 | (1,376,540 | ) | 1,611,045 | ||||||||||||
| Reclassification adjustments, net of tax, in connection with other-than-temporary impairment of investments | (5,557,939 | ) | - | - | ||||||||||||
| Total other comprehensive income (loss): | (1,000,577 | ) | (1,684,490 | ) | 1,626,299 | |||||||||||
| Comprehensive loss | $ | (29,208,953 | ) | $ | (21,132,211 | ) | $ | (13,848,312 | ) | |||||||
| Loss per share for continuing operations: | ||||||||||||||||
| Basic | $ | (2.09 | ) | $ | (1.70 | ) | $ | (1.43 | ) | |||||||
| Diluted | $ | (2.09 | ) | $ | (1.70 | ) | $ | (1.43 | ) | |||||||
| Loss per share for discontinued operations: | ||||||||||||||||
| Basic | $ | - | $ | - | $ | (0.36 | ) | |||||||||
| Diluted | $ | - | $ | - | $ | (0.36 | ) | |||||||||
| Net loss per share: | ||||||||||||||||
| Basic | $ | (2.09 | ) | $ | (1.70 | ) | $ | (1.79 | ) | |||||||
| Diluted | $ | (2.09 | ) | $ | (1.70 | ) | $ | (1.79 | ) | |||||||
| Weighted average common shares outstanding: | ||||||||||||||||
| Basic | 13,507,408 | 11,472,306 | 8,627,094 | |||||||||||||
| Diluted | 13,507,408 | 11,472,306 | 8,627,094 | |||||||||||||
| CELLULAR BIOMEDICINE GROUP, INC. | ||||||||
| CONSOLIDATED BALANCE SHEETS | ||||||||
| December 31, | December 31, | |||||||
| 2016 | 2015 | |||||||
| Assets | ||||||||
| Cash and cash equivalents | $ | 39,252,432 | $ | 14,884,597 | ||||
| Accounts receivable, less allowance for doubtful amounts of $10,163 | ||||||||
| and $nil as of December 31, 2016 and December 31, 2015, respectively | 39,974 | 630,332 | ||||||
| Other receivables | 412,727 | 271,344 | ||||||
| Inventory | - | 390,886 | ||||||
| Prepaid expenses | 986,951 | 367,050 | ||||||
| Taxes recoverable | - | 150,082 | ||||||
| Total current assets | 40,692,084 | 16,694,291 | ||||||
| Investments | 509,424 | 5,379,407 | ||||||
| Property, plant and equipment, net | 4,117,739 | 2,768,900 | ||||||
| Goodwill | 7,678,789 | 7,678,789 | ||||||
| Intangibles, net | 14,092,581 | 15,949,100 | ||||||
| Long-term prepaid expenses and other assets | 1,537,850 | 989,935 | ||||||
| Total assets | $ | 68,628,467 | $ | 49,460,422 | ||||
| Liabilities and Stockholders' Equity | ||||||||
| Liabilities: | ||||||||
| Accounts payable | $ | 216,154 | $ | 260,886 | ||||
| Accrued expenses | 1,168,787 | 845,087 | ||||||
| Taxes payable | 28,875 | - | ||||||
| Other current liabilities | 950,220 | 1,913,284 | ||||||
| Total current liabilities | 2,364,036 | 3,019,257 | ||||||
| Other non-current liabilities | 370,477 | 76,229 | ||||||
| Total liabilities | 2,734,513 | 3,095,486 | ||||||
| Stockholders' equity: | ||||||||
| Preferred stock, par value $.001, 50,000,000 shares | ||||||||
| authorized; none issued and outstanding as of | ||||||||
| December 31, 2016 and 2015, respectively | - | - | ||||||
| Common stock, par value $.001, 300,000,000 shares authorized; | ||||||||
| 14,281,378 and 11,711,645 issued and outstanding | ||||||||
| as of December 31, 2016 and 2015, respectively | 14,281 | 11,711 | ||||||
| Additional paid in capital | 152,543,052 | 103,807,651 | ||||||
| Accumulated deficit | (85,546,687 | ) | (57,338,311 | ) | ||||
| Accumulated other comprehensive income (loss) | (1,116,692 | ) | (116,115 | ) | ||||
| Total stockholders' equity | 65,893,954 | 46,364,936 | ||||||
| Total liabilities and stockholders' equity | $ | 68,628,467 | $ | 49,460,422 | ||||
| CELLULAR BIOMEDICINE GROUP, INC. | ||||||||||||
| CONSOLIDATED STATEMENTS OF CASH FLOWS | ||||||||||||
| For the Year Ended | ||||||||||||
| December 31, | ||||||||||||
| 2016 | 2015 | 2014 | ||||||||||
| CASH FLOWS FROM OPERATING ACTIVITIES: | ||||||||||||
| Net loss | $ | (28,208,376 | ) | $ | (19,447,721 | ) | $ | (15,474,611 | ) | |||
| Adjustments to reconcile net loss to net cash | ||||||||||||
| used in operating activities: | ||||||||||||
| Depreciation and amortization | 2,635,001 | 2,094,644 | 1,190,505 | |||||||||
| Loss on disposal of assets | 2,156 | 1,444 | 257,672 | |||||||||
| Stock based compensation expense | 5,452,417 | 7,592,438 | 2,528,885 | |||||||||
| Other than temporary impairment on investments | 4,611,714 | 123,428 | 1,427,840 | |||||||||
| Realized losses from sale of investments | - | 5,178 | 5,913 | |||||||||
| Value of stock received for services | - | - | (1,610,000 | ) | ||||||||
| Impairment of goodwill | - | - | 3,299,566 | |||||||||
| (Reversal) of inventory provision | (115,391 | ) | 123,848 | - | ||||||||
| Allowance for doubtful account | 10,163 | - | - | |||||||||
| Decrease in fair value of accrued expenses for the acquisition of intangible assets | - | (345,882 | ) | - | ||||||||
| Changes in operating assets and liabilities: | ||||||||||||
| Accounts receivable | 537,155 | (497,937 | ) | 20,645 | ||||||||
| Other receivables | (156,672 | ) | (143,711 | ) | (25,638 | ) | ||||||
| Inventory | 514,734 | (142,486 | ) | (78,310 | ) | |||||||
| Prepaid expenses | (669,598 | ) | 181,679 | (494,057 | ) | |||||||
| Taxes recoverable | 150,082 | (150,082 | ) | - | ||||||||
| Other current assets | - | 110,347 | 24,314 | |||||||||
| Investments | - | - | 7,150 | |||||||||
| Long-term prepaid expenses and other assets | (643,673 | ) | (384,432 | ) | (504,678 | ) | ||||||
| Accounts payable | (28,205 | ) | (166,032 | ) | 165,517 | |||||||
| Accrued expenses | 356,420 | 396,557 | 409,109 | |||||||||
| Advance payable to related party | - | (30,216 | ) | - | ||||||||
| Other current liabilities | (640,573 | ) | 113,919 | (694,131 | ) | |||||||
| Taxes payable | 28,875 | (814,288 | ) | (176,583 | ) | |||||||
| Other non-current liabilities | 296,036 | (371,793 | ) | - | ||||||||
| Net cash used in operating activities | (15,867,735 | ) | (11,751,098 | ) | (9,720,892 | ) | ||||||
| CASH FLOWS FROM INVESTING ACTIVITIES: | ||||||||||||
| Acquisition of business, net of cash acquired | - | (1,568,627 | ) | (1,485,548 | ) | |||||||
| Proceed from sale of investments, net of issuance cost paid | - | 1,480 | - | |||||||||
| Purchases of intangible assets | (56,519 | ) | (4,260,420 | ) | (8,989 | ) | ||||||
| Purchases of property, plant and equipment | (2,676,888 | ) | (1,874,538 | ) | (311,625 | ) | ||||||
| Net cash used in investing activities | (2,733,407 | ) | (7,702,105 | ) | (1,806,162 | ) | ||||||
| CASH FLOWS FROM FINANCING ACTIVITIES: | ||||||||||||
| Net proceeds from the issuance of common stock | 42,399,874 | 18,964,849 | 19,121,956 | |||||||||
| Proceeds from exercise of stock options | 885,680 | 682,303 | 19,383 | |||||||||
| Repayment of advance from affiliate | - | - | (31,745 | ) | ||||||||
| Net cash provided by financing activities | 43,285,554 | 19,647,152 | 19,109,594 | |||||||||
| EFFECT OF EXCHANGE RATE CHANGES ON CASH | (316,577 | ) | (79,936 | ) | 12,829 | |||||||
| INCREASE IN CASH AND CASH EQUIVALENTS | 24,367,835 | 114,013 | 7,595,369 | |||||||||
| CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD | 14,884,597 | 14,770,584 | 7,175,215 | |||||||||
| CASH AND CASH EQUIVALENTS, END OF PERIOD | $ | 39,252,432 | $ | 14,884,597 | $ | 14,770,584 | ||||||
| SUPPLEMENTAL CASH FLOW INFORMATION | ||||||||||||
| Cash paid for income taxes | $ | 6,705 | $ | 108,075 | $ | 460,924 | ||||||
| Non-cash investing activities | ||||||||||||
| Acquisition of intangible assets through issuance of the Company's stock | $ | - | $ | 1,481,462 | $ | 1,442,850 | ||||||
| Acquisition of business through issuance of the Company's stock | $ | - | $ | - | $ | 14,496,256 | ||||||
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