Cellular Biomedicine Group Reports First Quarter 2015 Financial Results and Provides Business Highlights
18 May 2015 - 8:10PM
Cellular Biomedicine Group, Inc. (Nasdaq:CBMG) ("CBMG" or the
"Company"), a 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, 2015 and provided business
highlights.
"I am very pleased with the progress that we have made thus far
in 2015," said Dr. William (Wei) Cao, Chief Executive Officer of
Cellular Biomedicine Group. "Our lead regenerative medicine
candidate, ReJoinTM human adipose-derived mesenchymal progenitor
cell (haMPC) therapy for Knee Osteoarthritis (KOA) continues to
make excellent progress, with positive interim clinical data from
the Phase IIb trial confirming observations from the Phase IIa
trial. The engagement of Huntsworth Health to build a global KOL
advocacy campaign for the clinical trials of ReJoinTM will serve to
analyze and broaden awareness of our clinical data. We expect to
complete Phase IIb 12 month patient follow-up by the fourth quarter
of 2015. We also announced positive Phase I clinical data from our
Chimeric Antigen Receptor T-cell (CAR-T) immuno-oncology clinical
development programs, CD19 for Acute Lymphocytic Leukemia (B-cell
ALL) and CD20 for Advanced Diffuse Large B Cell Lymphoma (DLBCL)
and will present our Phase I clinical data of CD30 for Hodgkin's
lymphoma at the upcoming World Stem Cells & Regenerative
Medicine Congress in London on May 21, 2015. We continue to
strengthen our research and development capability with our
international-standard GMP facility in Shanghai, which passed its
4th consecutive CFDA inspection, and expect to slate our third GMP
facility in Beijing with the recently signed lease for a 15,000
square feet site. The recent addition of two new members to our
Scientific Advisory Board will further fortify our Stem Cell and
Immuno-Oncology platforms as we continue to position Cellular
Biomedicine Group as a leader in both stem cell and cancer immune
cell technologies in China."
"Thus far in 2015, we have achieved many business milestones and
continue to deliver value to our shareholders," commented Tony
(Bizuo) Liu, Chief Financial Officer of the Company. "Our upgrade
to the NASDAQ Global Market validates the strong positive momentum
around our cell therapy platforms and our strict adherence to
corporate governance. The expansion of our GMP facilities to
Beijing will allow us to prepare for any increases in demand from
our two cellular platforms in the near future. We closed a private
placement transaction of approximately $19.6 Million, which
strengthens the Company's cash position which will enable the
Company to execute on its clinical milestones and to build a
world-class biotechnology firm focused on providing solutions that
address large unmet medical needs."
First Quarter 2015 Financial Performance
1. Cash Position: Cash and cash equivalents as
of March 31, 2015 were $31.1 million compared to $14.8 million as
of December 31, 2014
2. Net Cash Used in Operating Activities: Net
cash used in operating activities for the first quarter of 2015 was
$2.41 million, compared to $2.38 million for the same period in
2014
3. Revenue: Revenues in the first quarter
of 2015 were $603,390 compared to $61,051 for the same
period in 2014. The revenue in first quarter 2015 is solely
comprised of sales from the technical services related to Agreen's
Tcm Immunotherapy service while revenue for the same period of 2014
is derived from the sales of the A-Stromalâ„¢ enzyme reagent kits. We
expect our biomedicine business to generate revenues primarily from
immune therapy and the development of therapies for the treatment
of KOA in the next three to four years.
4. G&A Expenses: General and
administrative expenses for the first quarter of 2015 were $3.5
million compared to $1.4 million for the same period in 2014.
Increased expenses in 2015 were associated with increased corporate
activities related to the management and development of our
biomedicine business, including:
- An increase in stock-based compensation expense of $1.4
million, which primarily resulted from the new grants and higher
fair value of unvested options after the Company listed on Nasdaq
from June 2014 compared with those unvested options as of March 31,
2014;
- An increase in depreciation and amortization of $187,000, which
was mainly attributed to the patents obtained from the acquisition
of AG in the third quarter of 2014;
- An increase in payroll expenses of $166,000; and
- An increase in legal, accounting and other professional
services of $211,000.
5. R&D Expenses: Research and
development expenses for the first quarter of 2015 were $734,484,
compared to $498,147 for the same period a year ago. The
increase was primarily attributable to the increase of the
Company's immunotherapy research and development team, which
resulted in an increase in payroll expenses and an increase in
rental expenses.
6. Net Loss: Net loss allocable to common
stock holders was $4.3 million, compared to $446,531 for the
same period in 2014. Changes in net loss are primarily
attributable to changes in operations of the biomedicine segment
and the discontinuation of the consulting segment.
Business Highlights of 2015 To Date
- Upgraded the listing of the Company's securities from the
NASDAQ Capital Market to the NASDAQ Global Market
- Closed a private placement transaction under which it sold an
aggregate of 515,789 shares of the Company's common stock to select
private investors for total gross proceeds of approximately $19.6
million
- Acquired Chinese PLA General Hospital's Chimeric Antigen
Receptor T cell (CAR-T) therapy, its recombinant expression vector
CD19, CD20, CD30 and Human Epidermal Growth Factor Receptor's (EGFR
or HER1) Immuno-Oncology patents (all pending), and Phase I/II
clinical data of the aforementioned therapies and manufacturing
knowledge
- Shanghai facility passed its 4th consecutive CFDA inspection,
adhering to more than 1000 Standard Operating
Procedures (SOPs) for operation and quality management
- Signed a lease for a 15,000 square feet site in Beijing slated
for the Company's third GMP facility, with completion expected in
Q3 2015
- Engaged Huntsworth Health, a global healthcare marketing and
communications agency to build a global KOL advocacy campaign for
the Company's ReJoinTM human adipose-derived mesenchymal
progenitor cell (haMPC) clinical trials for the treatment of Knee
Osteoarthritis
- Hosted "Advancing Solutions to Cancerous and Degenerative
Straits" open house and tour at the Company's Shanghai GMP
facility
- Appointed two members to the newly established Scientific
Advisory Board to advise the Company on immuno-oncology and stem
cell technology and its applications
Technology Achievements of 2015 To Date
- Released interim 24-week clinical data from the Phase IIb trial
of the Company's ReJoinTM human adipose-derived mesenchymal
progenitor cell (haMPC) therapy for Knee Osteoarthritis (KOA)
- Released clinical data from its CAR-T immuno-oncology clinical
development programs, CD19 for Acute Lymphocytic Leukemia
(B-cell ALL) and CD20 for Advanced Diffuse Large B Cell Lymphoma
(DLBCL)
- Initiated patient recruitment to support a study of
ReJoinTM human adipose derived mesenchymal progenitor cell
(haMPC) therapy for Cartilage Damage (CD) resulting from
osteoarthritis (OA) or sports injury
Upcoming Events
Management plans to participate in the following upcoming
industry and investor conferences:
- May 20-22, 10th Annual World Stem Cells & Regenerative
Medicine Congress, London, UK
- June 1-4, Jefferies 2015 Global Healthcare Conference, New
York, USA
About Cellular Biomedicine Group
Cellular Biomedicine Group, Inc. develops proprietary cell
therapies for the treatment of certain degenerative diseases and
cancers. Our developmental stem cell, progenitor cell, and
immune cell projects are the result of research and development by
scientists and doctors from China and the United
States. Our flagship GMP facility in China, consisting of eight
independent cell production lines, is 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, but are not
limited to, risk factors inherent in doing business.
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 BALANCE
SHEETS |
(UNAUDITED) |
|
|
|
|
March 31, |
December 31, |
|
2015 |
2014 |
|
|
|
Assets |
|
|
Cash and cash equivalents |
$31,144,667 |
$14,770,584 |
Accounts receivable |
339,973 |
141,029 |
Other receivables |
190,919 |
135,957 |
Inventory |
277,868 |
372,249 |
Prepaid expenses |
641,906 |
565,299 |
Other current assets |
-- |
110,347 |
Total current
assets |
32,595,333 |
16,095,465 |
|
|
|
Investments |
4,187,676 |
6,886,033 |
Property, plant and equipment,
net |
1,382,983 |
1,280,410 |
Goodwill |
7,678,789 |
7,678,789 |
Intangibles, net |
10,868,067 |
11,156,676 |
Long-term prepaid expenses and
other assets |
1,226,054 |
587,729 |
Total
assets |
$57,938,902 |
$43,685,102 |
|
|
|
Liabilities and Stockholders'
Equity |
|
|
|
|
|
Liabilities: |
|
|
Accounts payable |
$160,174 |
$426,917 |
Accrued expenses |
2,216,612 |
2,074,384 |
Taxes payable |
588,233 |
814,288 |
Advances payable to related
party |
-- |
36,254 |
Other current liabilities |
2,066,895 |
724,479 |
Total current liabilities |
5,031,914 |
4,076,322 |
|
|
|
Other non-current
liabilities |
239,328 |
452,689 |
Total liabilities |
5,271,242 |
4,529,011 |
|
|
|
Commitments and Contingencies |
|
|
|
|
|
Stockholders' equity: |
|
|
|
|
|
Preferred stock, par
value $.001, 50,000,000 shares |
|
|
authorized; none issued
and outstanding as of |
|
|
March 31, 2015 and
December 31, 2014, respectively |
-- |
-- |
|
|
|
Common stock, par value
$.001, 300,000,000 shares authorized; |
|
|
11,514,021 and 10,990,335
issued and outstanding |
|
|
as of March 31, 2015 and
December 31, 2014, respectively |
11,514 |
10,990 |
Additional paid in capital |
95,814,194 |
75,467,316 |
Accumulated deficit |
(42,177,761) |
(37,890,590) |
Accumulated other
comprehensive income (loss) |
(980,287) |
1,568,375 |
Total stockholders' equity |
52,667,660 |
39,156,091 |
|
|
|
Total liabilities and
stockholders' equity |
$57,938,902 |
$43,685,102 |
|
CELLULAR BIOMEDICINE GROUP,
INC. |
CONDENSED CONSOLIDATED
STATEMENT OF OPERATIONS AND COMPREHENSIVE LOSS |
(UNAUDITED) |
|
|
|
|
For the Three Months
Ended |
|
March
31, |
|
2015 |
2014 |
|
|
|
Net sales and revenue |
$603,390 |
$61,051 |
|
|
|
Operating expenses: |
|
|
Cost of sales |
458,984 |
40,600 |
General and
administrative |
3,483,866 |
1,382,513 |
Selling and marketing |
101,407 |
21,359 |
Research and development |
734,484 |
498,147 |
Impairment of investments |
123,428 |
-- |
Total operating
expenses |
4,902,169 |
1,942,619 |
Operating loss |
(4,298,779) |
(1,881,568) |
|
|
|
Other income (expense): |
|
|
Interest income |
15,111 |
225 |
Other income (expense) |
(2,703) |
20,137 |
Total other
income |
12,408 |
20,362 |
Loss from continuing operations before
taxes |
(4,286,371) |
(1,861,206) |
|
|
|
Income taxes provision |
(800) |
-- |
|
|
|
Loss from continuing operations |
(4,287,171) |
(1,861,206) |
|
|
|
Profit on discontinued operations, net of
taxes |
-- |
1,414,675 |
|
|
|
Net loss |
$(4,287,171) |
$(446,531) |
Other comprehensive income (loss): |
|
|
Cumulative translation
adjustment |
19,609 |
(11,813) |
Unrecognized loss on
investments |
(2,568,271) |
(521,448) |
Total other comprehensive
loss: |
(2,548,662) |
(533,261) |
|
|
|
Comprehensive loss |
$(6,835,833) |
$(979,792) |
|
|
|
Loss per share for continuing
operations: |
|
|
Basic |
$(0.39) |
$(0.25) |
Diluted |
$(0.39) |
$(0.25) |
|
|
|
Earnings per share for discontinued
operations: |
|
|
Basic |
$-- |
$0.19 |
Diluted |
$-- |
$0.19 |
|
|
|
Net loss per share : |
|
|
Basic |
$(0.39) |
$(0.06) |
Diluted |
$(0.39) |
$(0.06) |
|
|
|
Weighted average common shares
outstanding: |
|
Basic |
11,039,208 |
7,494,815 |
Diluted |
11,039,208 |
7,494,815 |
|
CELLULAR BIOMEDICINE GROUP,
INC. |
CONDENSED CONSOLIDATED
STATEMENTS OF CASH FLOWS |
|
|
|
|
For the Three Months
Ended |
|
March
31, |
|
2015 |
2014 |
|
|
|
CASH FLOWS FROM OPERATING ACTIVITIES: |
|
|
Net loss |
$(4,287,171) |
$(446,531) |
Adjustments to reconcile
net loss to net cash |
|
|
used in operating
activities: |
|
|
Depreciation and
amortization |
439,242 |
217,064 |
Loss on disposal of assets |
-- |
12,313 |
Stock based compensation
expense |
1,719,458 |
279,445 |
Amortization of deferred stock
compensation |
-- |
35,358 |
Other than temporary impairment
on investments |
123,428 |
-- |
Realized losses from sale of
investments |
5,178 |
5,203 |
Value of stock received for
services |
-- |
(1,610,000) |
Changes in operating
assets and liabilities: |
|
|
Accounts receivable |
(198,944) |
(24,000) |
Other receivables |
(38,463) |
(72,382) |
Inventory |
94,381 |
(14,570) |
Prepaid expenses |
(81,602) |
(120,425) |
Other current assets |
110,346 |
3,357 |
Investments |
-- |
5,200 |
Long-term prepaid expenses and
other assets |
(44,340) |
(300,186) |
Accounts payable |
(266,744) |
(36,524) |
Accrued expenses |
142,276 |
(217,100) |
Advances payable to
related party |
(30,216) |
-- |
Other current liabilities |
346,585 |
(95,567) |
Taxes payable |
(226,055) |
-- |
Other non-current
liabilities |
(213,254) |
-- |
Net cash used in
operating activities |
(2,405,895) |
(2,379,345) |
|
|
|
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 |
(179,293) |
(19,342) |
Net cash used in investing
activities |
(747,641) |
(19,342) |
|
|
|
CASH FLOWS FROM FINANCING ACTIVITIES: |
|
|
Net proceeds from the issuance
of common stock |
19,564,846 |
1,221,980 |
Proceeds from exercise of stock
options |
26,590 |
-- |
Repayment of advance from
affiliate |
-- |
(33,457) |
Net cash provided by
financing activities |
19,591,436 |
1,188,523 |
|
|
|
EFFECT OF EXCHANGE RATE CHANGES ON CASH |
(63,817) |
(7,747) |
|
|
|
INCREASE/(DECREASE) IN CASH AND CASH
EQUIVALENTS |
16,374,083 |
(1,217,911) |
CASH AND CASH EQUIVALENTS, BEGINNING OF
PERIOD |
14,770,584 |
7,175,215 |
CASH AND CASH EQUIVALENTS, END OF PERIOD |
$31,144,667 |
$5,957,304 |
|
|
|
|
|
|
SUPPLEMENTAL CASH FLOW
INFORMATION |
|
|
|
|
|
Cash paid for income taxes |
$(226,855) |
$-- |
CONTACT: Sarah Kelly
Director of Corporate Communications, CBMG
+1 650 566-5064
sarah.kelly@cellbiomedgroup.com
Vivian Chen
Managing Director Investor Relations, Grayling
+1 347 481-3711
vivian.chen@grayling.com
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