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8-K - CURRENT REPORT - Cellular Biomedicine Group, Inc. | cbmg_8k.htm |
Exhibit 99.1
Cellular Biomedicine Group Reports Full-Year 2017 Financial Results
and Recent Operational Progress
●
Expanded
GMP manufacturing capacity to become one of the largest in-house
CAR-T manufacturers amongst leading global biopharmaceutical
companies
●
Signed
partnerships with GE Healthcare Life Sciences China & Thermo
Fisher Scientific China to improve cell manufacturing
processes
●
Received
approximately $45.1 million in funding from institutional and
strategic investors in Q4, 2017 and Q1 2018 combined
SHANGHAI, China and CUPERTINO, Calif., March 06, 2018 (GLOBE
NEWSWIRE) -- Cellular Biomedicine Group Inc.
(NASDAQ:CBMG) ("CBMG"
or the "Company"), a clinical-stage biopharmaceutical firm engaged
in the development of immunotherapies for cancer and stem cell
therapies for degenerative diseases, today announced business
highlights and financial results for the fiscal year ended December
31, 2017.
"2017 was a pivotal year for CBMG and for the cell therapy
environment. The U.S. Food and Drug Administration (FDA) had
approved the first two chimeric antigen receptor T cell (CAR-T)
therapies that use a patient's own T cells to fight
cancer. The issuance in December 2017 of China's CFDA Guiding
Principles for the Research and Evaluation of Cell Therapy Products
provides a clear path for CBMG to advance our pipeline from
clinical development to commercialization. We have initiated
our CAR-T clinical trials and have been recruiting patients. We
opened our new state-of-the-art GMP manufacturing facility in
Shanghai's Pharma Valley and signed strategic partnerships with GE
Healthcare Life Sciences China and Thermo Fisher Scientific China
to focus on improving manufacturing processes for cell therapies,"
said Tony (Bizuo) Liu, CEO of the Company. "These recent
advancements, complete with existing in-house integrated Chemistry
Manufacturing Controls ("CMC"), further our global leadership in
cell therapy manufacturing and advance our goal to carry out
transformative cancer treatment for patients. We have $48.9 million
on hand at end of February 2018 to support our on-going clinical
trials into 2019."
Tony Liu added, "We have also further strengthened our advisory
team with the appointments of Dr. Michael A. Caligiuri,
2017-2018 President of American Association for Cancer
Research ("AACR"), and President of City of Hope National Medical
Center, as Chair of the company's External Advisory Board and Dr.
Robert S. Langer, Professor of The Koch Institute for Integrative
Cancer Research at MIT, as a member of the Company's Scientific
Advisory Board."
2017 & Early 2018 Clinical and Facility Highlights
Immuno-Oncology Platform
●
Commenced
CALL-1 ("CAR-T against Acute Lymphoblastic Leukemia") Phase I
clinical trial in China with CBMG's optimized proprietary C-CAR011
construct of CD19 CAR-T therapy for the treatment of adult patients
with Acute Lymphoblastic Leukemia ("ALL");
●
Expanded
the Phase I clinical trial in China of the Company's ongoing CARD-1
("CAR-T Against DLBCL") study in patients with Diffuse Large B-cell
Lymphoma ("DLBCL");
●
Sought
to expand our efforts to develop therapies targeting solid tumors
by acquiring a three-year option to license T-cell Receptor ("TCR")
technology in Hepatocellular Carcinoma ("HCC").
Stem Cell Platform
●
Completed 48-week follow-up of all patients in
Phase I clinical trial of an "Off-the-Shelf" Allogeneic
adipose-derived haMPC AlloJoinTM therapy
for the treatment of Knee Osteoarthritis (KOA) patients in
China;
●
Awarded $2.29 million by the California Institute
for Regenerative Medicine (CIRM), to support pre-clinical studies
of AlloJoinTM,
CBMG's "Off-the-Shelf" Allogeneic stem cell treatment for KOA in
the United States.
GMP Expansion and Capabilities
●
Expanded
the Company's cell therapy manufacturing capabilities with the
opening of a new 100,000-square-foot, state-of-the-art GMP
manufacturing facility located in Shanghai Zhangjiang High-Tech
Park (Shanghai's "Pharma Valley");
●
Completed
the expansion of a 30,000 square foot multipurpose facility in
Wuxi, China, which will be dedicated to advanced stem cell
culturing, centralized plasmid and viral vector production, cell
banking and development of reagents;
●
Established strategic partnership with GE
Healthcare Life Sciences China to co-develop certain high-quality
industrial control processes in CAR-T and stem cell manufacturing.
A joint laboratory, named "CBMG-GE Joint Laboratory of Cell
Therapy" using GE Healthcare's FlexFactoryTM platform
will be established within CBMG's Shanghai GMP manufacturing
facility and will be dedicated to the joint research and
development of a functionally integrated and automated
immunotherapy cell preparation system;
1
●
Established
a strategic partnership with Thermo Fisher Scientific China Ltd. to
build a "CBMG-Thermo Fisher Scientific Joint Innovation &
Application Center" which will focus on the research and
development of an automated cell therapy manufacturing
system.
Recent Business Highlights
●
Advanced
the Company's cash position with two private placement transactions
for total aggregate gross proceeds of approximately $45
Million;
●
Sailing
Capital, an institutional-quality, returns-focused private equity
firm initiated by Shanghai International Group - the financial
holding group of the Shanghai Municipal Government - became a
significant investor in the Company.
Full Year 2017 Financial Results
Cash Position: The Company had working capital of $20.9
million as of December 31, 2017 compared to $38.3 million as of
December 31, 2016. Cash position decreased to $21.6 million at
December 31, 2017 compared to $39.3 million at December 31, 2016.
We had an increase in cash used in operating and investing
activities, partially offset by cash inflow generated from
financing activities due to a private placement financing in 2017
for aggregate net proceeds of approximately $14.5
million.
Net Cash Used in Operating Activities: Full-year 2017 net cash
used in operating activities was $18.6 million compared
to $15.9 million in 2016. The 2017 change in operating
assets and liabilities was primarily due to an increase in accounts
receivable, other receivables and long-term prepaid expenses as
well as the decrease in accrued expenses and non-current
liabilities, netting of by the increase in other current
liabilities.
Revenue: Full-year 2017 revenue was $0.3 million compared
to $0.6 million in 2016. The majority of the revenue was
derived from cell therapy technology service for the year ended
December 31, 2017. The decrease in revenue is the result of
prioritizing cancer therapeutic technologies, and focusing our
clinical efforts on developing CAR-T technologies, Vaccine, Tcm and
TCR clonality technologies.
G&A Expenses: Full-year 2017 general and administrative
expenses were $12.8 million compared to $11.7 million in 2016.
There was an increase in rental expenses of $2.2 million, which
mainly resulted from the new leased plant located in the "Pharma
Valley" of Shanghai from January 1, 2017.
R&D Expenses: Full-year 2017 research and development
expenses were $14.6 million compared to $11.5 million in 2016. The
increase was primarily attributed to an increase in rental expenses
of $1,514,000, which was mainly attributed to the launching of
R&D activities at our Beijing facility in the 2nd quarter of
2016 and the lease of a GMP facility in the United States to
commence the KOA preclinical and clinical studies in
2017.
Net Loss: Full-year 2017 net loss allocable to common stock
holders was $25.5 million compared to $28.2 million in
2016.
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. 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, which
partnerships focus on improving manufacturing processes for cell
therapies. 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). In 2017, CBMG was awarded $2.29 million from
the California Institute for Regenerative Medicine (CIRM) to
support pre-clinical studies of AlloJoin™ for KOA in the
United States. 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 our plan to configure
part of our Shanghai facility with GE Healthcare's FlexFactory
platform, 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, 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.
|
2
CELLULAR BIOMEDICINE GROUP, INC.
CONSOLIDATED STATEMENT OF OPERATIONS AND COMPREHENSIVE
LOSS
|
For the Year
EndedDecember 31,
|
||
|
2017
|
2016
|
2015
|
|
|
|
|
Net sales and
revenue
|
$336,817
|
$627,930
|
$2,505,423
|
|
|
|
|
Operating
expenses:
|
|
|
|
Cost of
sales
|
162,218
|
860,417
|
1,880,331
|
General and
administrative
|
12,780,483
|
11,670,506
|
13,068,255
|
Selling and
marketing
|
360,766
|
425,040
|
709,151
|
Research and
development
|
14,609,917
|
11,475,587
|
7,573,228
|
Impairment of
investments
|
-
|
4,611,714
|
123,428
|
Total
operating expenses
|
27,913,384
|
29,043,264
|
23,354,393
|
Operating
loss
|
(27,576,567)
|
(28,415,334)
|
(20,848,970)
|
|
|
|
|
Other
income:
|
|
|
|
Interest
income
|
133,621
|
78,943
|
42,220
|
Other
income
|
1,955,086
|
132,108
|
630,428
|
Total
other income
|
2,088,707
|
211,051
|
672,648
|
Loss before
taxes
|
(25,487,860)
|
(28,204,283)
|
(20,176,322)
|
|
|
|
|
Income taxes
(expenses) credit
|
(2,450)
|
(4,093)
|
728,601
|
|
|
|
|
|
|
|
|
Net
loss
|
$(25,490,310)
|
$(28,208,376)
|
$(19,447,721)
|
Other comprehensive
income (loss):
|
|
|
|
Cumulative
translation adjustment
|
967,189
|
(743,271)
|
(307,950)
|
Unrealized
gain (loss) on investments, net of tax
|
(240,000)
|
5,300,633
|
(1,376,540)
|
Reclassification
adjustments, net of tax, in connection with other-than-temporary
impairment of investments
|
-
|
(5,557,939)
|
-
|
Total other
comprehensive income (loss):
|
727,189
|
(1,000,577)
|
(1,684,490)
|
|
|
|
|
Comprehensive
loss
|
$(24,763,121)
|
$(29,208,953)
|
$(21,132,211)
|
|
|
|
|
Net loss per
share
|
|
|
|
Basic
|
$(1.78)
|
$(2.09)
|
$(1.70)
|
Diluted
|
$(1.78)
|
$(2.09)
|
$(1.70)
|
|
|
|
|
Weighted average
common shares outstanding:
|
|
|
|
Basic
|
14,345,604
|
13,507,408
|
11,472,306
|
Diluted
|
14,345,604
|
13,507,408
|
11,472,306
|
|
|
|
|
3
CELLULAR BIOMEDICINE GROUP, INC.
CONSOLIDATED BALANCE SHEETS
|
December
31,
|
December
31,
|
|
2017
|
2016
|
Assets
|
|
|
Cash and cash
equivalents
|
$21,568,422
|
$39,252,432
|
Accounts
receivable, less allowance for doubtful amounts of
$10,789
|
|
|
and $10,163
as of December 31, 2017 and December 31, 2016,
respectively
|
202,887
|
39,974
|
Other
receivables
|
902,940
|
412,727
|
Prepaid
expenses
|
1,852,695
|
986,951
|
Total current
assets
|
24,526,944
|
40,692,084
|
|
|
|
Investments
|
269,424
|
509,424
|
Property, plant and
equipment, net
|
12,973,342
|
4,117,739
|
Goodwill
|
7,678,789
|
7,678,789
|
Intangibles,
net
|
12,419,692
|
14,092,581
|
Long-term prepaid
expenses and other assets
|
3,294,105
|
1,537,850
|
Total
assets
|
$61,162,296
|
$68,628,467
|
|
|
|
Liabilities
and Stockholders' Equity
|
|
|
|
|
|
Liabilities:
|
|
|
Accounts
payable
|
$225,287
|
$216,154
|
Accrued
expenses
|
1,097,327
|
1,168,787
|
Taxes
payable
|
28,875
|
28,875
|
Other current
liabilities
|
2,324,632
|
950,220
|
Total current
liabilities
|
3,676,121
|
2,364,036
|
|
|
|
Other non-current
liabilities
|
183,649
|
370,477
|
Total
liabilities
|
3,859,770
|
2,734,513
|
|
|
|
|
|
|
Preferred
stock, par value $.001, 50,000,000 shares
|
|
|
authorized;
none issued and outstanding as of
|
|
|
December
31, 2017 and 2016, respectively
|
-
|
-
|
|
|
|
Common
stock, par value $.001, 300,000,000 shares authorized;
|
|
|
15,615,558
and 14,281,378 issued; and 15,188,764 and 14,281,378
outstanding,
|
|
|
as
of December 31, 2017 and 2016, respectively
|
15,616
|
14,281
|
Treasury
stock at cost; 426,794 and nil shares of common stock
|
(3,977,929)
|
-
|
as
of December 31, 2017 and December 31, 2016,
respectively
|
|
|
Additional paid in
capital
|
172,691,339
|
152,543,052
|
Accumulated
deficit
|
(111,036,997)
|
(85,546,687)
|
Accumulated
other comprehensive loss
|
(389,503)
|
(1,116,692)
|
Total stockholders'
equity
|
57,302,526
|
65,893,954
|
|
|
|
Total liabilities
and stockholders' equity
|
$61,162,296
|
$68,628,467
|
4
CELLULAR BIOMEDICINE GROUP, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
|
For the Year
Ended
|
||
|
December
31,
|
||
|
2017
|
2016
|
2015
|
CASH FLOWS FROM
OPERATING ACTIVITIES:
|
|
|
|
Net
loss
|
$(25,490,310)
|
$(28,208,376)
|
$(19,447,721)
|
Adjustments
to reconcile net loss to net cash
|
|
|
|
used
in operating activities:
|
|
|
|
Depreciation and
amortization
|
2,985,963
|
2,635,001
|
2,094,644
|
Loss on disposal of
assets
|
317
|
2,156
|
1,444
|
Stock based
compensation expense
|
5,345,211
|
5,452,417
|
7,592,438
|
Other than
temporary impairment on investments
|
-
|
4,611,714
|
123,428
|
Realized losses
from sale of investments
|
-
|
-
|
5,178
|
(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
|
(160,628)
|
537,155
|
(497,937)
|
Other
receivables
|
(467,985)
|
(156,672)
|
(143,711)
|
Inventory
|
-
|
514,734
|
(142,486)
|
Prepaid
expenses
|
(812,675)
|
(669,598)
|
181,679
|
Taxes
recoverable
|
-
|
150,082
|
(150,082)
|
Other current
assets
|
-
|
-
|
110,347
|
Long-term prepaid
expenses and other assets
|
(1,005,029)
|
(643,673)
|
(384,432)
|
Accounts
payable
|
(814)
|
(28,205)
|
(166,032)
|
Accrued
expenses
|
(118,968)
|
356,420
|
396,557
|
Advance payable to
related party
|
-
|
-
|
(30,216)
|
Other current
liabilities
|
1,339,866
|
(640,573)
|
113,919
|
Taxes
payable
|
-
|
28,875
|
(814,288)
|
Other non-current
liabilities
|
(208,340)
|
296,036
|
(371,793)
|
Net
cash used in operating activities
|
(18,593,392)
|
(15,867,735)
|
(11,751,098)
|
|
|
|
|
CASH FLOWS FROM
INVESTING ACTIVITIES:
|
|
|
|
Acquisition
of business, net of cash acquired
|
-
|
-
|
(1,568,627)
|
Proceed
from sale of investments, net of issuance cost paid
|
-
|
-
|
1,480
|
Purchases of
intangible assets
|
(23,734)
|
(56,519)
|
(4,260,420)
|
Purchases of
property, plant and equipment
|
(10,169,134)
|
(2,676,888)
|
(1,874,538)
|
Net
cash used in investing activities
|
(10,192,868)
|
(2,733,407)
|
(7,702,105)
|
|
|
|
|
CASH FLOWS FROM
FINANCING ACTIVITIES:
|
|
|
|
Net proceeds from
the issuance of common stock
|
14,496,040
|
42,399,874
|
18,964,849
|
Proceeds from
exercise of stock options
|
308,371
|
885,680
|
682,303
|
Repurchase of
treasury stock
|
(3,977,929)
|
-
|
-
|
Net
cash provided by financing activities
|
10,826,482
|
43,285,554
|
19,647,152
|
|
|
|
|
EFFECT OF EXCHANGE
RATE CHANGES ON CASH
|
275,768
|
(316,577)
|
(79,936)
|
|
|
|
|
INCREASE IN CASH
AND CASH EQUIVALENTS
|
(17,684,010)
|
24,367,835
|
114,013
|
CASH AND CASH
EQUIVALENTS, BEGINNING OF PERIOD
|
39,252,432
|
14,884,597
|
14,770,584
|
CASH AND CASH
EQUIVALENTS, END OF PERIOD
|
$21,568,422
|
$39,252,432
|
$14,884,597
|
|
|
|
|
SUPPLEMENTAL
CASH FLOW INFORMATION
|
|
|
|
Cash paid for
income taxes
|
$2,450
|
$6,705
|
$108,075
|
|
|
|
|
Non-cash investing
activities
|
|
|
|
Acquisition
of intangible assets through issuance of the Company's
stock
|
$-
|
$-
|
$1,481,462
|
Contacts:
Sarah Kelly
Director of Corporate Communications, CBMG
+1 650 566-5064
sarah.kelly@cellbiomedgroup.com
5