Cellular Biomedicine Group Reports Full-Year 2015 Financial Results and Recent Operational Progress

Shanghai, CHINA


- Achieved first clinical milestones for CD19, CD20, CD30 and EGFR CAR-T cell assets
- Expanded Immuno-Oncology platform with key acquisitions
- Expanded Stem Cell platform with the launch of new autologous and allogeneic clinical trials
- Reported positive clinical data from Phase IIb trial of ReJoin® haMPC therapy
- Commenced revenue-generating technology consulting services to hospitals in several provinces in China
- Solid 2015 year-end cash position of $14.8 million

SHANGHAI, China and PALO ALTO, Calif., March 14, 2016 (GLOBE NEWSWIRE) -- Cellular Biomedicine Group Inc. (NASDAQ:CBMG) (“CBMG” or the “Company”), a clinical-stage biomedicine firm engaged in the development of effective treatments for degenerative and cancerous diseases, today reported business highlights and financial results for the full year ended December 31, 2015.

“2015 proved to be a transformative year for Cellular Biomedicine Group with the Company’s entrance into the dynamic field of immuno-oncology.  We now operate under dual technology platforms:  Immuno-oncology (I/O) and Stem Cells.  We expect to advance several of our CAR-T candidates including CBM.CD19 and CBM.CD20 into multiple indications of hematological cancer. Eventually, our effort to sponsor multi-center clinical trials in the near future should lead to servicing the large cancer market in China. We also reported encouraging Phase IIb data from our most advanced stem cell program for Knee Osteoarthritis (KOA), and we will explore the possibility of entrance into the U.S. market,” commented Tony (Bizou) Liu, CBMG’s Chief Executive Officer.  “The expansion of our GMP facilities into Beijing allows us to prepare for anticipated manufacturing demands from our immuno-oncology and stem cell platforms for clinical trials and future commercialization opportunities.  We strengthened our operating and management capabilities with the addition of key talents, which will better position the Company to monetize our growing cell therapy pipeline. We look forward to an exciting 2016 as we leverage these strengths to execute on our clinical milestones, build an innovative pipeline and move our clinical assets into later stage clinical development.”

2015 and Recent Clinical Developments

Immuno-Oncology Platform

  • Announced positive clinical data from Phase I of its CAR-T immuno-oncology clinical development programs of:
    • CBM-CD19.1 for Acute Lymphoblastic Leukemia (B-cell ALL)
    • CBM-CD20.1 for Advanced Diffuse Large B Cell Lymphoma (DLBCL)
    • CBM-CD30.1 for Stage III and IV Hodgkin's lymphoma
    • CBM-EGFR.1 for the treatment of patients with EGFR expressing advanced relapsed/refractory solid tumors.
  • In all trials the assets were shown to be safe, feasible and efficacious.
  • The participants enrolled in the studies were advanced, relapsed, and/or refractory to other standard-of-care therapies. This patient population has substantial unmet medical needs.

Stem Cell Therapies 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 mesenchymal progenitor cell (haMPC) AlloJoinTM therapy for KOA patients in China;
  • Recruited patients for a clinical study on ReJoin® therapy for Cartilage Damage (CD) resulting from sports injury, which also serves as a supporting study of ReJoin® for KOA with arthroscopic evidences. We plan to release results from this study in 1H 2017.

2015 and Recent Corporate Highlights

  • Completed two acquisitions, which substantially increased CBMG’s immuno-oncology platform, including:
    • PLA General Hospital’s (“PLAGH”, Beijing, also known as “301 Hospital”) Chimeric Antigen Receptor T cell (CAR-T) therapies, redirected T cells against CD19, CD20, CD30 and Human Epidermal Growth Factor Receptor (EGFR or HER1), their patents (all pending), and Phase I/II clinical data of the aforementioned therapies and manufacturing knowledge;
    • Blackbird Bio Finance and University of South Florida’s (“Licensor”) next generation GVAX vaccine’s (“CD40LGVAX”) related technologies,  technical knowledge and FDA IND approved clinical trial protocol
  • Expanded the Company’s cell manufacturing capabilities with the opening of the Company’s third GMP facility, a 15,000 square feet site in Beijing, China, approximately half of which has been designed as a GMP equipped facility to support clinical batch production and commercial scale manufacturing;
  • Commenced revenue generation through the Company’s T Cells Receptor (“TCR”) clonality analysis and CentrixTTM adoptive cell transfer technology services provided to 9 cooperative hospitals located in Beijing, Shandong and Anhui provinces in China;
  • Strengthened the leadership team with the appointments of Richard L. Wang, Ph.D., MBA, PMP, formerly with GSK, as Chief Operating Officer and Yihong Yao, Ph.D., B.S., formerly with Astrazeneca/Medimmune as Chief Scientific Officer;
  • Formed a Scientific Advisory Board (SAB) with the appointment of Alan List, M.D. as Chair of the SAB, the appointment of Scott J. Antonia, M.D., Ph.D. to advise the company on immuno-oncology and Guoping Fan, Ph.D. to advise the Company on stem cell technology and its applications;
  • Continued to demonstrate good corporate governance by meeting the required higher listing standards to successfully upgrade the listing of the Company’s securities from the NASDAQ Capital Market to the NASDAQ Global Market and being selected into the broad-market Russell 3000® Index;
  • Advanced the Company’s cash position:
    • Total private placement transactions of approximately $19.6 Million in 2015
    • Announced agreement of Wuhan Dangdai Science & Technology Industries Group Inc. to invest up to $43.13 million for 2.27 million shares of the Company’s common stock, representing a 19.4% stake investment in Q1 2016 with an initial closing of $5 million in February 2016, and the remaining $38.13 million by April 15, 2016.

Full Year 2015 Financial Results

Cash Position: The Company had working capital of $13.7 million as of December 31, 2015 compared to $12.0 million as of December 31, 2014. Cash position increased to $14.9 million at December 31, 2015 compared to $14.8 million at December 31, 2014, due to an increase in cash generated from financing activities as a result of a private placement financing in 2015 for aggregate net proceeds of approximately $19.0 million, partially offset by an increase in cash used in operating and investing activities.

Net Cash Used in Operating Activities: Full-year 2015 net cash used in operating activities was $11.8 million compared to $9.7 million in 2014. The change in operating assets and liabilities was primarily due to an increase in accounts receivables, long-term prepaid expenses combined with decreases in tax payables and non-current liabilities, partially offset by an increase in accrued expenses.

Revenue: Full-year 2015 revenue was $2.5 million compared to $0.6 million in 2014. All revenue for the year ended December 31, 2015 was derived from TCR technology services.

G&A Expenses: Full-year 2015 general and administrative expenses were $13.1 million compared $7.9 million in 2014.  Increased expenses in 2015 were associated with increased corporate activities related to the management and the development of the Company’s biomedicine business, which were primarily attributed to:

  • An increase in stock-based compensation expense of $3.7 million, which primarily resulted from the new grants and higher fair value of unvested options in 2015 after the Company listed on Nasdaq in June 2014 compared with those unvested options as of December 31, 2014;
  • An increase in payroll of $0.3 million in line with the headcount increase in management in 2015;
  • An increase in depreciation and amortization of $0.2 million, which was mainly attributed to the technical knowledge and patents obtained from the acquisition of AG in the third quarter 2014;

R&D Expenses: Full-year 2015 research and development expenses were $7.6 million compared to $3.1 million in 2014, the increase mainly attributable to the increase of our immunotherapy research and development team, which resulted in an increase in payroll expenses of $1.2 million and an increase in stock-based compensation expenses of $1.8 million.

Net Loss: Full-year 2015 net loss allocable to common stock holders was $19.4 million compared to $15.5 million in 2014.  Changes in net loss were primarily attributable to changes in operations of our biomedicine segment.

Primary 2016 Operating Objectives

The Company’s key 2016 operational objectives are to seek early possibilities of conducting multi-center Phase IIb trials with its CAR-T constructs after confirming their safety and tolerability profile, to evaluate feasibility of sponsoring a registration trial-like clinical study to support a New Drug Application (NDA) for an allogeneic haMPC Knee Osteoarthritis therapy (“Allo KOA”) study in the United States, and continue to build a pipeline of advanced technologies to bolster the Company’s CAR-T China market position.

About Cellular Biomedicine Group
Cellular Biomedicine Group, Inc. develops proprietary cell therapies for the treatment of certain degenerative and cancerous diseases.  Our developmental stem cell and Immuno-Oncology projects are the result of research and development by scientists and doctors from China and the United States. Our GMP facilities in China, consisting of nine independent cell production lines, are 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 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.
 CONSOLIDATED STATEMENT OF OPERATIONS AND COMPREHENSIVE LOSS 
     
      
   For the Year Ended
December 31,
    2015  2014  2013 
      
Net sales and revenue  $2,505,423 $564,377 $204,914 
      
Operating expenses:     
Cost of sales   1,880,331  242,215  296,212 
General and administrative   13,068,255  7,875,413  9,162,172 
Selling and marketing   709,151  314,894  58,275 
Research and development   7,573,228  3,146,499  2,041,872 
Impairment of investments   123,428  1,427,840  - 
Total operating expenses   23,354,393  13,006,861  11,558,531 
Operating loss   (20,848,970) (12,442,484) (11,353,617)
      
Other income (expense):     
Interest income   42,220  15,043  1,294 
Other income (expense)   630,428  71,982  (6,196)
Total other income (expense)   672,648  87,025  (4,902)
Loss from continuing operations before taxes   (20,176,322) (12,355,459) (11,358,519)
      
Income taxes (expense) credit   728,601  -  - 
      
Loss from continuing operations   (19,447,721) (12,355,459) (11,358,519)
      
Loss on discontinued operations, net of taxes   -  (3,119,152) (2,438,514)
      
Net loss  $(19,447,721)$(15,474,611)$(13,797,033)
Other comprehensive income (loss):     
Cumulative translation adjustment   (307,950) 15,254  78,650 
Unrecognized gain (loss) on investments   (1,376,540) 1,611,045  (198,200)
Total other comprehensive income (loss):   (1,684,490) 1,626,299  (119,550)
      
Comprehensive loss  $(21,132,211)$(13,848,312)$(13,916,583)
      
Loss per share for continuing operations:     
Basic  $(1.70)$(1.43)$(1.96)
Diluted  $(1.70)$(1.43)$(1.96)
      
Loss per share for discontinued operations:     
Basic  $- $(0.36)$(0.42)
Diluted  $- $(0.36)$(0.42)
      
Net loss per share :     
Basic  $(1.70)$(1.79)$(2.38)
Diluted  $(1.70)$(1.79)$(2.38)
      
Weighted average common shares outstanding:     
Basic   11,472,306  8,627,094  5,792,888 
Diluted   11,472,306  8,627,094  5,792,888 


CELLULAR BIOMEDICINE GROUP, INC.
 CONSOLIDATED BALANCE SHEETS
 
     
  December 31, December 31,
   2015   2014 
     
 Assets   
Cash and cash equivalents$14,884,597  $14,770,584 
Accounts receivable 630,332   141,029 
Other receivables 271,344   135,957 
Inventory 390,886   372,249 
Prepaid expenses 367,050   565,299 
Taxes recoverable 150,082   - 
Other current assets -   110,347 
Total current assets 16,694,291   16,095,465 
     
Investments 5,379,407   6,886,033 
Property, plant and equipment, net 2,768,900   1,280,410 
Goodwill 7,678,789   7,678,789 
Intangibles, net 15,949,100   11,156,676 
Long-term prepaid expenses and other assets 989,935   587,729 
Total assets$49,460,422  $43,685,102 
     
Liabilities and Stockholders' Equity   
     
Liabilities:   
Accounts payable$260,886  $426,917 
Accrued expenses 845,087   2,074,384 
Taxes payable -   814,288 
Advances payable to related party -   36,254 
Other current liabilities 1,913,284   724,479 
Total current liabilities 3,019,257   4,076,322 
     
Other non-current liabilities 76,229   452,689 
Total liabilities 3,095,486   4,529,011 
     
Commitments and Contingencies   
     
Stockholders' equity:   
     
Preferred stock, par value $.001, 50,000,000 shares   
authorized; none issued and outstanding as of   
December 31, 2015 and 2014, respectively -   - 
     
Common stock, par value $.001, 300,000,000 shares authorized;   
11,711,645 and 10,990,335 issued and outstanding   
as of December 31, 2015 and 2014, respectively 11,711   10,990 
Additional paid in capital 103,807,651   75,467,316 
Accumulated deficit (57,338,311)  (37,890,590)
Accumulated other comprehensive income (loss) (116,115)  1,568,375 
Total stockholders' equity 46,364,936   39,156,091 
     
Total liabilities and stockholders' equity$49,460,422  $43,685,102 


CELLULAR BIOMEDICINE GROUP, INC.
 CONSOLIDATED STATEMENTS OF CASH FLOWS
    
 For the Year Ended
 December 31,
  2015  2014  2013 
   
CASH FLOWS FROM OPERATING ACTIVITIES:   
Net loss$(19,447,721)$(15,474,611)$(13,797,033)
Adjustments to reconcile net loss to net cash used in operating activities:   
Depreciation and amortization 2,094,644  1,190,505  841,235 
Loss on disposal of assets 1,444  257,672  - 
Stock based compensation expense 7,592,438  2,528,885  4,381,077 
Other than temporary impairment on investments 123,428  1,427,840  - 
Realized losses from sale of investments 5,178  5,913  138,909 
Value of stock received for services -  (1,610,000) (3,500,000)
Impairment of goodwill -  3,299,566  4,258,967 
Inventory provision 123,848  -  - 
Decrease in fair value of accrued expenses for the acquisition of intangible assets (345,882) -  - 
Third party services received in exchange for disposition of investment stock -  -  83,334 
Deferred tax -  -  (76,544)
Changes in operating assets and liabilities:   
Accounts receivable (497,937) 20,645  10,102 
Other receivables (143,711) (25,638) 50,160 
Inventory (142,486) (78,310) (81,878)
Prepaid expenses 181,679  (494,057) (38,793)
Taxes recoverable (150,082) -  - 
Other current assets 110,347  24,314  (84,661)
Investments -  7,150  - 
Long-term prepaid expenses and other assets (384,432) (504,678) 134,229 
Accounts payable (166,032) 165,517  40,862 
Accrued expenses 396,557  409,109  (739,839)
Advance payable to related party (30,216) -  - 
Other current liabilities 113,919  (694,131) 186,464 
Taxes payable (814,288) (176,583) (10,121)
Other non-current liabilities (371,793) -  (251,834)
Net cash used in operating activities (11,751,098) (9,720,892) (8,455,364)
    
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 transaction costs 1,480  -  - 
Purchases of intangible assets (4,260,420) (8,989) (5,828)
Purchases of property, plant and equipment (1,874,538) (311,625) (147,211)
Net cash used in investing activities (7,702,105) (1,806,162) (153,039)
    
CASH FLOWS FROM FINANCING ACTIVITIES:   
Net proceeds from the issuance of common stock 18,964,849  19,121,956  11,561,386 
Proceeds from exercise of stock options 682,303  19,383  - 
Advance from affiliates -  -  36,614 
Repayment of advance from affiliate -  (31,745) (1,250)
Net cash provided by financing activities 19,647,152  19,109,594  11,596,750 
    
EFFECT OF EXCHANGE RATE CHANGES ON CASH (79,936) 12,829  41,972 
    
INCREASE IN CASH AND CASH EQUIVALENTS 114,013  7,595,369  3,030,319 
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD 14,770,584  7,175,215  4,144,896 
CASH AND CASH EQUIVALENTS, END OF PERIOD$14,884,597 $14,770,584 $7,175,215 
    
SUPPLEMENTAL CASH FLOW INFORMATION   
    
Cash paid for income taxes$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 $- 
Issuance of company stock for accrued liabilities and advances$- $- $149,475 
    

Contacts:
Sarah Kelly 
Director of Corporate Communications, CBMG

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

Vivian Chen
Managing Director Investor Relations, Grayling
+1 347 481-3711
vivian.chen@grayling.com