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.comForward-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 STATEMENT OF OPERATIONS AND COMPREHENSIVE LOSS | ||||
| 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 |
| CELLULAR BIOMEDICINE GROUP, INC. | ||
| CONDENSED CONSOLIDATED BALANCE SHEETS | ||
| June 30, | December 31, | |
| 2014 | 2013 | |
| Assets | ||
| 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 | ||
| Liabilities: | ||
| 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 |
| CELLULAR BIOMEDICINE GROUP, INC. | ||
| CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS | ||
| For the Six Months Ended | ||
| June 30, | ||
| 2014 | 2013 | |
| CASH FLOWS FROM OPERATING ACTIVITIES: | ||
| 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) |
| CASH FLOWS FROM INVESTING ACTIVITIES: | ||
| 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 |
| CASH FLOWS FROM FINANCING ACTIVITIES: | ||
| 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) |
| EFFECT OF EXCHANGE RATE CHANGES ON CASH | 79 | 13,319 |
| 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 |
| SUPPLEMENTAL CASH FLOW INFORMATION | ||
| 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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