Cellular Biomedicine Group Reports Second Quarter And First Half 2014 Financial Results And Provides Business Highlights

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PALO ALTO, Calif., Aug. 14, 2014 (GLOBE NEWSWIRE) -- Cellular Biomedicine Group Inc. (Nasdaq:CBMG) (the "Company"), a biomedicine firm engaged in the development of new treatments for degenerative and cancerous diseases, today reported financial results for the three and six months ended June 30, 2014 and provided business highlights including the six-month data from its Phase I/IIa clinical trial for ReJoinTM treatment for Knee Osteoarthritis (KOA).

Dr. William (Wei) Cao, Chief Executive Officer of Cellular Biomedicine Group, commented, "We are very excited about the progress we have made so far this year with our lead product candidate ReJoinTM for Knee Osteoarthritis, especially with the Phase IIa six-month follow-up MRI data. The IIa twelve-month follow-up MRI test has been completed and final analysis will be available in the third quarter of this year. All patients in the Phase IIb trial completed treatment in July. We grew our Intellectual Property portfolio to 41 patents in various stages of approval in China, U.S. and PCT, including 12 granted China patents. We are excited about our recent announcement to add new potential reduced time-to-commercialization TCR cancer immunotherapy to our technology platform."

Financial Results

Cellular Biomedicine Group reported a net loss for the three and six months ended June 30, 2014 of $6.7 million, or $0.85 loss per share and $7.1 million, or $0.93 loss per share, respectively, compared to a net loss of $2.5 million, or $0.44 loss per share, and $7.9 million, or $1.52 loss per share, for the same periods a year ago. The increase in net loss of $4.2 million for the three months ended June 30, 2014 compared to the same period in 2013 is related to one-time costs incurred, including impairment of goodwill and employee severance, for the discontinuation of the Consulting segment. The decrease in net loss of $0.8 million for the six months ended June 30, 2014 compared to the same period in 2013 is due to one-time merger expenses incurred in 2013, partially offset by the costs of discontinuing the Consulting segment.

General and administrative expenses for the three months ended June 30, 2014 increased $0.1 million compared to the same period in 2013. The six months ended June 30, 2014 decreased $2.7 million as compared to the same period in 2013, mainly from the costs related to merger activities incurred in 2013.

Research and development expense, depreciation and amortization expense remained relatively unchanged for the three and six months ended June 30, 2014 and 2013. Other income changed minimally as compared to prior periods for rent subsidy.

As of June 30, 2014, the Company had $13.6 million in cash and cash equivalents. For the six months ended June 30, 2014, cash used for operations was $4.7 million compared to $4.6 million for the same period in 2013.

Business Highlights

During and since the second quarter of 2014, Cellular Biomedicine Group strengthened its position as a leading pure-play biotechnology company from China by achieving the following milestones and significant corporate events:

  • Released positive six-month data from Phase I/IIa Clinical Trial for ReJoinTM treatment of Knee Osteoarthritis (KOA), which MRI testing revealed an increase in cartilage volume of whole joint as early as three months after the therapy, and confirmed average of 53.07mm3 six months after the therapy.
  • Commenced Phase IIb Clinical Trial for ReJoinTM treatment of KOA.
  • Completed patient enrollment for Phase IIb Clinical Trial for ReJoinTM treatment of KOA.
  • Launched pre-clinical study on human adipose derived mesenchymal progenitor cell (haMPC) therapy for asthma.
  • Strengthened the Company's IP portfolio with the addition of one new China patent granted and two new international patents filed.
  • Discontinued the company's Consulting segment.
  • Commenced trading on Nasdaq Capital Market as the first pure-play cell therapy company from China approved for listing on Nasdaq.
  • Closed a private placement transaction for total gross proceeds of approximately $10 Million, the net proceeds of which will primarily be used for ongoing clinical trials, working capital and potential acquisitions of strategic assets.
  • Announced the proposed acquisition of Agreen Biotech Co., Ltd. China and its founder's U.S. patent for $3.28 million in cash and the issuance of 753,522 shares of CBMG common stock and the issuance of 75,000 shares of CBMG common stock. The proposed acquisition would include Intellectual Property ("IP"), assets and talents of this cancer-therapy focused developmental stage company. The IP is comprised of T Cells Receptor ("TCR") clonality analysis technology and T Central Memory Cell (Tcm) and Dendritic Cell ("DC") preparation methodologies.

Commenting on the results, Tony (Bizuo) Liu, Chief Financial Officer of Cellular Biomedicine Group said, "The recent successful private placement of $10 million and our decision to discontinue the Consulting segment has allowed us to prioritize the Company's resources on pursuing pure cell therapy R&D and further clinical trials. We believe the continued acquisitions of cutting edge technologies and talents will position CBMG as a leader in both stem cell and immune cell technologies in China. We look forward to keeping our shareholders apprised of new developments."

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, 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.

For the Three Months Ended For the Six Months Ended
June 30, June 30,
2014 2013 2014 2013
Net sales and revenue:
Biomedical $ 118,069 $ -- $ 179,120 $ --
Total sales and revenue 118,069 -- 179,120 --
Operating expenses:
Cost of sales 51,953 -- 92,553 --
General and administrative 1,719,316 1,578,653 3,101,828 5,758,402
Selling and marketing 44,136 46,552 65,495 52,230
Research and development 642,830 639,276 1,140,977 1,119,781
Total operating expenses 2,458,235 2,264,481 4,400,853 6,930,413
Operating loss (2,340,166) (2,264,481) (4,221,733) (6,930,413)
Other income:
Interest income 341 560 565 872
Other income 74,480 22,611 94,617 16,540
Total other income 74,821 23,171 95,182 17,412
Loss from continuing operations before taxes (2,265,345) (2,241,310) (4,126,551) (6,913,001)
Income tax provision -- -- -- --
Loss from continuing operations (2,265,345) (2,241,310) (4,126,551) (6,913,001)
Loss from discontinued Consulting segment (4,408,918) (263,204) (2,994,243) (1,007,558)
Income tax benefit -- -- -- --
Loss on discontinued operations (4,408,918) (263,204) (2,994,243) (1,007,558)
Net loss $ (6,674,263) $ (2,504,514) $ (7,120,794) $ (7,920,559)
Other comprehensive loss:
Cumulative translation adjustment 4,978 31,959 (6,835) 31,959
Unrecognized gain (loss) on investments 4,042,797 (112,253) 3,521,349 (734,573)
Comprehensive loss $ (2,626,488) $ (2,584,808) $ (3,606,280) $ (8,623,173)
Earnings per share for continuing operations:
Basic $ (0.29) $ (0.39) $ (0.54) $ (1.33)
Diluted $ (0.29) $ (0.39) $ (0.54) $ (1.33)
Earnings per share discontinued operations:
Basic $ (0.56) $ (0.05) $ (0.39) $ (0.19)
Diluted $ (0.56) $ (0.05) $ (0.39) $ (0.19)
Earnings per share net loss:
Basic $ (0.85) $ (0.44) $ (0.93) $ (1.52)
Diluted $ (0.85) $ (0.44) $ (0.93) $ (1.52)
Weighted average common shares outstanding:
Basic 7,829,314 5,719,075 7,660,974 5,196,583
Diluted 7,829,314 5,719,075 7,660,974 5,196,583

June 30,
December 31,
2014 2013
Cash and cash equivalents $ 13,563,521 $ 7,175,215
Accounts receivable 24,000 10,581
Other receivable 63,069 78,521
Inventory 156,490 119,119
Prepaid expenses 437,473 191,572
Total current assets 14,244,553 7,575,008
Investments 10,224,177 5,105,891
Property, plant and equipment, net 819,912 1,014,805
Goodwill -- 3,299,566
Intangibles, net 419,599 601,456
Long-term prepaid expenses and other assets 498,888 --
Total assets (1) $ 26,207,129 $ 17,596,726
Liabilities and Stockholders' Equity
Accounts payable $ 109,097 $ 213,891
Accrued expenses 1,071,606 503,717
Advances payable to related party 34,471 67,999
Other current liabilities 1,305,066 1,416,046
Total current liabilities 2,520,240 2,201,653
Total liabilities (1) 2,520,240 2,201,653
Stockholders' equity:
Preferred stock, par value $.001, 50,000,000 shares authorized; none issued and outstanding as of June 30, 2014 and December 31, 2013, respectively -- --
Common stock, par value $.001, 300,000,000 shares authorized; 9,074,068 and 7,382,797 issued and outstanding as of June 30, 2014 and December 31, 2013, respectively 9,074 7,383
Additional paid in capital 49,757,998 37,861,593
Accumulated deficit (29,536,773) (22,415,979)
Accumulated other comprehensive income (loss) 3,456,590 (57,924)
Total stockholders' equity 23,686,889 15,395,073
Total liabilities and stockholders' equity $ 26,207,129 $ 17,596,726
For the Six Months Ended
June 30,
2014 2013
Net loss $ (7,120,794) $ (7,920,559)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization 437,015 425,578
Loss on disposal of assets 10,358 --
Stock based compensation expense 612,622 710,402
Amortization of deferred stock compensation 63,518 337,217
Common stock issued for services -- 1,844,155
Impairment of goodwill 3,299,566 --
Loss recognized in excess of cash received on disposition of investment stock 5,913 69,071
Value of stock received for services (1,610,000) --
Deferred tax -- (14,783)
Changes in operating assets and liabilities:
Accounts receivables (13,419) 20,683
Investments 7,150 --
Other receivables 15,452 (38,104)
Inventory (37,371) 6,802
Prepaid expenses and other assets (245,901) (154,994)
Long-term prepaid expenses and other assets (498,888) 14,802
Accounts payables (104,794) (16,704)
Other current liabilities (110,980) (149,048)
Accrued expenses 567,889 254,944
Net cash used in operating activities (4,722,664) (4,610,538)
Acquisition of business, net of cash acquired -- 2,568,995
Proceeds from the sale of assets -- 10,071
Purchases of intangibles -- (12,880)
Purchases of assets (77,537) (52,465)
Net cash (used in) provided by investing activities (77,537) 2,513,721
Proceeds from the issuance of common stock 11,221,956 --
Repayment of advances from affiliate (33,528) (1,250)
Net cash provided by (used in) financing activities 11,188,428 (1,250)
INCREASE (DECREASE) IN CASH 6,388,306 (2,084,748)
CASH, BEGINNING OF PERIOD 7,175,215 4,144,896
CASH, END OF PERIOD $ 13,563,521 $ 2,060,148
Non cash financing and investing activities:
Issuance of company stock for accrued liabilities and advances $ -- $ 149,475
Issuance of stock for services $ -- $ 1,844,155
CONTACT: Sarah Kelly Director of Corporate Communications, CBMG +1 650 566-5064 sarah.kelly@cellbiomedgroup.com Vivian Chen Managing Director Investor Relations, Grayling +1 646-284-9427 vivian.chen@grayling.com

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