Cellular Biomedicine Group Reports First Quarter 2016 Financial Results and Provides Business Highlights

Shanghai, CHINA


– Reported Positive Clinical Data from Phase IIb trial of ReJoin® haMPC therapy
– Expanded Stem Cell Platform with the Launch of New Allogeneic Clinical Trial
– Closed Strategic Investment of $43.13 million in the First Four Months of 2016

SHANGHAI, China and CUPERTINO, Calif., May 09, 2016 (GLOBE NEWSWIRE) -- Cellular Biomedicine Group, Inc. (Nasdaq:CBMG) ("CBMG" or the "Company"), a clinical-stage biomedicine firm engaged in the development of effective stem cell therapies for degenerative diseases and immunotherapies for cancer, reported financial results for the first quarter ended March 31, 2016 and provided business highlights.

“In the first quarter of 2016, we made several key clinical and business advancements that we expect will promote long-term growth and strengthen our presence in the cancer and osteoarthritis markets,” commented Tony (Bizuo) Liu, CBMG’s Chief Executive Officer.  “We reported encouraging Phase IIb data from our most advanced stem cell program for autologous adipose-derived mesenchymal progenitor cell (haMPC) ReJoin® therapy for Knee Osteoarthritis (KOA), and launched a Phase I clinical trial for an off-the-shelf allogeneic haMPC AlloJoinTM therapy for KOA. The closing of a $43.13 million strategic investment through April 2016 brings us closer to reaching our objectives of launching multi-site clinical trials in immuno-oncology cell therapies in China, to file INDs and launch clinical trials for AlloJoinTM therapy for KOA patients in the US and to further strengthen our pipeline. We are determined to build on the momentum from the first quarter and believe that we can accomplish meaningful progress on our 2016 operating objectives.”

First Quarter 2016 Financial Performance

  1. Cash Position:  Cash and cash equivalents as of March 31, 2016 were $15.7 million compared to $14.9 million as of December 31, 2015. We had an increase in cash generated from financing activities due to a private placement financing in February 2016 for gross proceeds of approximately $5 million.
  2. Net Cash Used in Operating Activities:  Net cash used in operating activities for the first quarter of 2016 was $3.58 million, compared to $2.41 million for the same period in 2015.
  3. Revenue:  Revenues in the first quarter of 2016 were $488,491 compared to $603,390 for the same period in 2015. The revenue in first quarter 2016 is solely comprised of the hospital’s technology services related to cell therapy treatments.
  4. G&A Expenses:  General and administrative expenses for the first quarter of 2016 were $2.8 million compared to $2.7 million for the same period in 2015.
  5. R&D Expenses:  Research and development expenses for the first quarter of 2016 were $2.40 million, compared to $1.46 million for the same period a year ago.  The increase was primarily attributable to the increase of the Company’s immunotherapy research and development team and expenses related to clinical trials.
  6. Net Loss:  Net loss allocable to common stock holders was $4.2 million, compared to $4.3 million for the same period in 2015.  

Business & Technology Highlights of 2016 To Date

  • Announced encouraging 48-week clinical data from the Phase IIb trial of the Company’s 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;
  • Advanced the Company’s cash position following the closing of an agreement with 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 16.2% post-money stake investment as of April 15, 2016.

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.
CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS AND COMPREHENSIVE LOSS
(UNAUDITED)
     
  For the Three Months Ended
  March 31,
   2016   2015 
     
Net sales and revenue $ 488,491  $ 603,390 
     
Operating expenses:    
Cost of sales   503,193    494,062 
General and administrative   2,775,925    2,680,237 
Selling and marketing   178,754    149,022 
Research and development   2,398,362    1,455,420 
Impairment of investments   -     123,428 
Total operating expenses   5,856,234    4,902,169 
Operating loss   (5,367,743)   (4,298,779)
     
Other income (expense):    
Interest income   17,050    15,111 
Other income (expense)   16,320    (2,703)
Total other income   33,370    12,408 
Loss before taxes   (5,334,373)   (4,286,371)
     
Income taxes credit (provision)   1,124,260    (800)
     
     
Net loss $ (4,210,113) $ (4,287,171)
Other comprehensive income (loss):    
Cumulative translation adjustment   16,073    19,609 
Unrealized gain (loss) on investments, net of tax of $4,514,060 and $nil, for the three months ended March 31, 2016 and 2015, respectively   16,416,517    (2,568,271)
Total other comprehensive income (loss):   16,432,590    (2,548,662)
     
Comprehensive gain (loss) $ 12,222,477  $ (6,835,833)
     
     
Net loss per share :    
Basic $ (0.35) $ (0.39)
Diluted $ (0.35) $ (0.39)
     
Weighted average common shares outstanding:    
Basic  11,884,066   11,039,208 
Diluted  11,884,066   11,039,208 
         



    
CELLULAR BIOMEDICINE GROUP, INC.   
CONDENSED CONSOLIDATED BALANCE SHEETS   
(UNAUDITED)   
     
  March 31, December 31,
   2016   2015 
     
Assets    
Cash and cash equivalents$ 15,667,528  $ 14,884,597 
Accounts receivable  582,714    630,332 
Other receivables  316,993    271,344 
Inventory  486,348    390,886 
Prepaid expenses  644,250    367,050 
Taxes recoverable  -     150,082 
Total current assets  17,697,833    16,694,291 
     
Investments  26,309,984    5,379,407 
Property, plant and equipment, net  2,743,466    2,768,900 
Goodwill  7,678,789    7,678,789 
Intangibles, net  15,511,705    15,949,100 
Long-term prepaid expenses and other assets  1,360,679    989,935 
Total assets$ 71,302,456  $ 49,460,422 
     
Liabilities and Stockholders' Equity   
     
Liabilities:   
Accounts payable$ 208,894  $ 260,886 
Accrued expenses  902,265    845,087 
Taxes payable  32,450    -  
Other current liabilities  2,026,264    1,913,284 
Total current liabilities  3,169,873    3,019,257 
     
Deferred tax liabilities  3,385,545    -  
Other non-current liabilities  26,311    76,229 
Total liabilities  6,581,729    3,095,486 
     
     
     
Stockholders' equity:   
     
Preferred stock, par value $.001, 50,000,000 shares   
authorized; none issued and outstanding as of   
March 31, 2016 and December 31, 2015, respectively  -     -  
     
Common stock, par value $.001, 300,000,000 shares authorized;   
12,001,188 and 11,711,645 issued and outstanding   
as of March 31, 2016 and December 31, 2015, respectively  12,001    11,711 
Additional paid in capital  109,940,675    103,807,651 
Accumulated deficit  (61,548,424)   (57,338,311)
Accumulated other comprehensive income (loss)  16,316,475    (116,115)
Total stockholders' equity  64,720,727    46,364,936 
     
Total liabilities and stockholders' equity$ 71,302,456  $ 49,460,422 
        


 
CELLULAR BIOMEDICINE GROUP, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
     
  For the Three Months Ended
  March 31,
   2016   2015 
   
CASH FLOWS FROM OPERATING ACTIVITIES:    
Net loss $  (4,210,113) $  (4,287,171)
Adjustments to reconcile net loss to net cash    
used in operating activities:    
Depreciation and amortization    671,649     439,242 
Stock based compensation expense    1,266,063     1,719,458 
Other than temporary impairment on investments    -      123,428 
Realized losses from sale of investments    -      5,178 
Changes in operating assets and liabilities:    
Accounts receivable    50,764     (198,944)
Other receivables    9,705     (38,463)
Inventory    (96,083)    94,381 
Prepaid expenses    (274,829)    (81,602)
Taxes recoverable    150,082     -  
Other current assets    -      110,346 
Long-term prepaid expenses and other assets    (38,522)    (44,340)
Accounts payable    (51,992)    (266,744)
Accrued expenses    57,178     142,276 
Advances  payable to related party    -      (30,216)
Other current liabilities    29,415     346,585 
Taxes payable    32,450     (226,055)
Deferred tax liabilities    (1,128,515)    -  
Other non-current liabilities    (50,049)    (213,254)
Net cash used in operating activities    (3,582,797)    (2,405,895)
     
CASH FLOWS FROM INVESTING ACTIVITIES:    
Proceed from sale of investments, net of issuance cost paid    -      1,480 
Purchases of intangibles    -      (569,828)
Purchases of assets    (674,736)    (179,293)
Net cash used in investing activities    (674,736)    (747,641)
     
CASH FLOWS FROM FINANCING ACTIVITIES:    
Net proceeds from the issuance of common stock    4,970,002     19,564,846 
Proceeds from exercise of stock options    93,249     26,590 
Repayment of advance from affiliate    -      -  
Net cash provided by financing activities    5,063,251     19,591,436 
     
EFFECT OF EXCHANGE RATE CHANGES ON CASH    (22,786)    (63,817)
     
INCREASE IN CASH AND CASH EQUIVALENTS    782,932     16,374,083 
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD    14,884,597     14,770,584 
CASH AND CASH EQUIVALENTS, END OF PERIOD $  15,667,529  $  31,144,667 
     
     
SUPPLEMENTAL CASH FLOW INFORMATION    
     
Cash paid for income taxes $  (4,255) $  (226,855)
 

        

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