Cellular Biomedicine Group Reports Third Quarter Financial Results And Recent Operational Highlights

SHANGHAI, China and CUPERTINO, Calif., Nov. 08, 2016 (GLOBE NEWSWIRE) -- Cellular Biomedicine Group Inc. (NASDAQ:CBMG) ("CBMG" or the "Company"), a clinical-stage biomedicine firm engaged in the development of immunotherapies for cancer and effective stem cell therapies for degenerative diseases, today reported financial results and business highlights for the third quarter ended September 30, 2016.

"In recent months, we have been diligently preparing for the launch of our upcoming CD19 and CD20 clinical studies and strengthening our CAR-T intellectual property portfolio," commented Tony (Bizuo) Liu, CBMG's Chief Executive Officer. "We believe that since August 2015, the China Food and Drug Administration has been working towards formalizing a national cell therapy policy that will lay the groundwork for the safe use of immune cell and stem cell therapy treatments in China.  Although the PRC government is still in the process of codifying industry regulations for such cell therapies, in anticipation of potential future market opportunities, we have accelerated the launch of multiple Phase I/IIb clinical studies with CAR-T CD19 and CD20 assets to advance our immuno-oncology pipeline.  We have a strong balance sheet to finance our current clinical studies and to further expand our translational medicine research and development." 

Third Quarter 2016 Financial Performance

1. Cash Position: $44.1 million cash and cash equivalents as compared to $14.9 million as of December 31, 2015. 2. Cash Used in Operating Activities: We used $3.3 million and $12.1 million for the three months and nine months ended September 30, 2016 in operating activities as compared to $2.9 million and $8.6 million for the same periods in 2015. 3. G&A Expenses: General and administrative expenses for the three months and nine months ended September 30, 2016 were $2.8 million and $8.6 million respectively, compared to $3.5 million and $9.9 million for the same periods in 2015. 4. R&D Expenses: Research and development expenses for the three months and nine months ended September 30, 2016 were $2.9 million and $8.3 million respectively, compared to $2.2 million and $5.0 million for the same periods in 2015. 5. Net Loss: Net loss allocable to common stock holders for the three months ended September 30, 2016 was $10.7 million, compared to $5.1 million for the same period in 2015. A $4.6 million impairment charge was incurred in the third quarter due to legacy, non-core business investments.

Business and Operational Highlights for the Third Quarter 2016 to date

  • The Company signed a tenancy deposit agreement to lease a 10,500 square meters facility located in Shanghai;
  • Appointment of Dr. Zhou Hansheng as a Director of the Company; and
  • Completed treatment of eighteen patients in Phase I clinical study of AlloJoin TM haMPC therapy for Knee Osteoarthritis (KOA).

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 twelve 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   For the Nine Months Ended  
    September 30,   September 30,  
    2016   2015   2016   2015  
                   
Net sales and revenue   $  10,012     $  624,907     $  570,102     $  1,885,256    
                   
Operating expenses:                  
Cost of sales      9,128        443,416        835,908        1,335,707    
General and administrative      2,790,305        3,467,184        8,638,877        9,915,956    
Selling and marketing      124,143        190,152        342,377        500,393    
Research and development      2,897,736        2,190,240        8,268,953        4,968,352    
Impairment of investments      4,611,714        -         4,611,714        123,428    
Total operating expenses      10,433,026        6,290,992        22,697,829        16,843,836    
Operating loss      (10,423,014 )      (5,666,085 )      (22,127,727 )      (14,958,580 )  
                   
Other income (expense):                  
Interest income      22,338        8,386        57,678        29,417    
Other income (expense)      (17,314 )      492,101        6,652        502,921    
Total other income, net      5,024        500,487        64,330        532,338    
Loss before taxes      (10,417,990 )      (5,165,598 )      (22,063,397 )      (14,426,242 )  
                   
Income taxes credit (provision)      (243,230 )      23,400        (5,218 )      (29,602 )  
                   
                   
Net loss   $  (10,661,220 )   $  (5,142,198 )   $  (22,068,615 )   $  (14,455,844 )  
Other comprehensive income (loss):                  
Cumulative translation adjustment      (58,824 )      (225,198 )      (314,189 )      (163,353 )  
Unrealized gain (loss) on investments, net of tax      -         (1,520,000 )      5,300,633        6,543,460    
Reclassification adjustments, net of tax, in connection with other-than-temporary impairment of investments      (5,557,939 )      -         (5,557,939 )      -     
Total other comprehensive income (loss):      (5,616,763 )      (1,745,198 )      (571,495 )      6,380,107    
                   
Comprehensive gain (loss)   $  (16,277,983 )   $  (6,887,396 )   $  (22,640,110 )   $  (8,075,737 )  
                   
                   
Net loss per share :                  
Basic   $  (0.75 )   $  (0.44 )   $  (1.67 )   $  (1.27 )  
Diluted   $  (0.75 )   $  (0.44 )   $  (1.67 )   $  (1.27 )  
                   
Weighted average common shares outstanding:                  
Basic     14,128,465       11,622,756       13,253,290       11,399,958    
Diluted     14,128,465       11,622,756       13,253,290       11,399,958    
   

CELLULAR BIOMEDICINE GROUP, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
 
  September 30,   December 31,
    2016      2015 
       
 Assets      
Cash and cash equivalents $  44,115,886     $  14,884,597  
Accounts receivable, less allowance for doubtful amounts of $10,707 and $nil as of September 30, 2016 and December 31, 2015, respectively    53,477        630,332  
Other receivables    264,802        271,344  
Inventory    253,173        390,886  
Prepaid expenses    661,144        367,050  
Taxes recoverable    -         150,082  
Total current assets    45,348,482        16,694,291  
       
Investments    509,424        5,379,407  
Property, plant and equipment, net    3,119,174        2,768,900  
Goodwill    7,678,789        7,678,789  
Intangibles, net    14,570,556        15,949,100  
Long-term prepaid expenses and other assets    1,507,686        989,935  
Total assets $  72,734,111     $  49,460,422  
       
Liabilities and Stockholders' Equity      
       
Liabilities:      
Accounts payable $  220,205     $  260,886  
Accrued expenses    663,880        845,087  
Taxes payable    30,000        -   
Other current liabilities    1,015,076        1,913,284  
Total current liabilities    1,929,161        3,019,257  
       
Other non-current liabilities    10,482        76,229  
Total liabilities    1,939,643        3,095,486  
       
       
       
Stockholders' equity:      
       
Preferred stock, par value $.001, 50,000,000 shares authorized; none issued and outstanding as of September 30, 2016 and December 31, 2015, respectively    -         -   
       
Common stock, par value $.001, 300,000,000 shares authorized; 14,240,610 and 11,711,645 issued and outstanding as of September 30, 2016 and December 31, 2015, respectively    14,241        11,711  
Additional paid in capital    150,874,763        103,807,651  
Accumulated deficit    (79,406,926 )      (57,338,311 )
Accumulated other comprehensive income (loss)    (687,610 )      (116,115 )
Total stockholders' equity    70,794,468        46,364,936  
       
Total liabilities and stockholders' equity $  72,734,111     $  49,460,422  
 

CELLULAR BIOMEDICINE GROUP, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
 
    For the Nine Months Ended
    September 30,
      2016      2015 
     
CASH FLOWS FROM OPERATING ACTIVITIES:        
Net loss   $  (22,068,615 )   $  (14,455,844 )
Adjustments to reconcile net loss to net cash used in operating activities:        
Depreciation and amortization      2,034,411        1,537,323  
Loss on disposal of assets      1,034        -   
Stock based compensation expense      3,944,125        5,672,955  
Decrease in fair value of accrued expenses for the acquisition of intangible assets      -         (413,559 )
Other than temporary impairment on investments      4,611,714        123,428  
Realized losses from sale of investments      -         5,178  
Inventory provision      110,145        -   
Allowance for doubtful account      10,707        -   
Changes in operating assets and liabilities:        
Accounts receivable      548,268        (275,317 )
Other receivables      1,275        (176,301 )
Inventory      33,398        (49,828 )
Prepaid expenses      (307,924 )      108,055  
Taxes recoverable      150,082        -   
Other current assets      -         110,347  
Long-term prepaid expenses and other assets      (376,214 )      (156,704 )
Accounts payable      (33,281 )      (280,548 )
Accrued expenses      (167,615 )      183,105  
Advances  payable to related party      -         (30,216 )
Other current liabilities      (528,430 )      (63,426 )
Taxes payable      30,000        (198,488 )
Other non-current liabilities      (65,449 )      (212,371 )
Net cash used in operating activities      (12,072,369 )      (8,572,211 )
         
CASH FLOWS FROM INVESTING ACTIVITIES:        
Proceed from sale of investments, net of issuance cost paid      -         1,480  
Purchases of intangibles      (11,160 )      (4,577,740 )
Purchases of assets      (1,642,179 )      (918,289 )
Net cash used in investing activities      (1,653,339 )      (5,494,549 )
         
CASH FLOWS FROM FINANCING ACTIVITIES:        
Net proceeds from the issuance of common stock      42,437,374        18,964,849  
Proceeds from exercise of stock options      685,712        478,798  
Net cash provided by financing activities      43,123,086        19,443,647  
         
EFFECT OF EXCHANGE RATE CHANGES ON CASH      (166,089 )      (41,094 )
         
INCREASE IN CASH AND CASH EQUIVALENTS      29,231,289        5,335,793  
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD      14,884,597        14,770,584  
CASH AND CASH EQUIVALENTS, END OF PERIOD   $  44,115,886     $  20,106,377  
         
         
SUPPLEMENTAL CASH FLOW INFORMATION        
Cash paid for income taxes   $  6,705     $  99,668  
         
Non-cash investing activities        
Acquisition of intangible assets through issuance of the Company's stock   $  -      $  1,096,399  

Contacts:Sarah KellyDirector of Corporate Communications, CBMG+1 408-973-7884sarah.kelly@cellbiomedgroup.comVivian ChenManaging Director Investor Relations, Grayling+1 347 481-371vivian.chen@grayling.com

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