Cellular Biomedicine Group Reports Strong 2018 Clinical Pipeline Progress and Strategic Advancements

Cellular Biomedicine Group, Inc. (NASDAQ: CBMG), known in Chinese as Xibiman, is a Chinese cell therapy biopharmaceutical company engaged in the development of cancer immunotherapies and stem cell therapies for degenerative diseases. The company operates GMP manufacturing facilities in Shanghai, Beijing, and Wuxi that comply with both U.S. FDA standards and Chinese national standards. These facilities cover a total area of over 3,000 square meters and feature 12 independent production lines. Xibiman is one of the few cell therapy technology companies in China to have received international SGS certification for its ISO 9001 quality management system. It possesses clinical-grade, standardized cell preparation processes and supporting technologies, along with more than 1,000 Standard Management Procedures (SMPs) and Standard Operating Procedures (SOPs).

CBMG operates cell banks in multiple cities, capable of storing cells from over 200,000 individuals, and employs an advanced cold-chain temperature control system (IT cloud system) to monitor cell culture, storage, and transportation. CBMG’s Shanghai facility includes the “Joint Laboratory for Cell Therapy” established with GE Healthcare and the “Joint Center for Technological Innovation and Application in Cell Therapy” developed in collaboration with Thermo Fisher Scientific. CBMG’s pipeline comprises preclinical candidates targeting CD20, CD22, and B-cell maturation antigen (BCMA), as well as specific CAR-T compounds, T-cell receptor (TCR) therapies, and tumor-infiltrating lymphocyte (TIL) technologies.

Reported business highlights and financial results for the fourth quarter and full year ended December 31, 2018.

- Signed a licensing and collaboration agreement with Novartis

- Secured NCI patent license for next-generation neoantigen-reactive tumor-infiltrating lymphocyte (TIL) technology to treat solid tumors

- At the newly expanded R&D center in Gaithersburg, Maryland

- Augment talent in clinical and medical leadership and investor relations to enhance communication with institutional investors

- Dr. Stephan Grupp Joins CBMG’s Scientific Advisory Board

- Completed two major investments in the company

- Strengthened balance sheet, with year-end cash of $52.8 million

“2018 was a landmark year for CytoMed. The licensing and collaboration agreement with Novartis reaffirmed our position in the cell therapy industry. We remain focused on our mission to provide safe and effective cell therapies for patients with unmet medical needs. We are committed to advancing our pipeline in 2019 and expanding into solid tumors using alpha-fetoprotein T-cell receptor (AFP-TCR) and tumor-infiltrating lymphocyte (TIL) technologies. We have a robust pipeline comprising eight novel drug candidates,” said Liu Bizuo, CEO of CytoMed. “We have strengthened our senior leadership team by hiring Michael Humphries, an experienced drug developer from Novartis, and Dr. Derrick Li, former Managing Director of the FBR Healthcare Investment Banking Group at B. Riley. We are honored to welcome Dr. Stephan Grupp to our Scientific Advisory Board. 2019 will be a busy year. In January, we announced the initiation of clinical trials targeting B-cell maturation antigen (BCMA). In addition to our AFP-TCR and TIL platforms for solid tumors, we plan to advance CAR-T clinical development programs in 2019 targeting CD22, CD20, and NKG2D for hematologic malignancies, as well as AFP TCR-T for metastatic hepatocellular carcinoma (HCC).”

Collaboration with Novartis’ Kymriah—CBMG and Novartis have signed a strategic licensing and collaboration agreement, under which CBMG will be responsible for the manufacturing and supply of the CAR-T cell therapy Kymriah (tisagenlecleucel) in China. CBMG has licensed certain proprietary technologies to Novartis for global use.

NCI Patent License for Next-Generation TIL Technology in the Treatment of Solid Tumors – Obtaining a patent license from the National Cancer Institute (NCI) of the U.S. National Institutes of Health (NIH) to develop, manufacture, and commercialize next-generation neoantigen-reactive TIL therapies for solid tumors.

Opening of the Global Research and Development Center in Maryland—A New R&D Center Established in Gaithersburg, Maryland.

Release of AlloJoin Clinical Results for Knee Osteoarthritis (KOA) – In 2018, promising results from the Phase I clinical trial of allogeneic human adipose-derived mesenchymal progenitor cells (haMPCs) for knee osteoarthritis were announced. Analysis of data from a 48-week study involving 22 patients demonstrated that AlloJoin, an allogeneic stem cell therapy, exhibited favorable safety and tolerability, along with early signs of efficacy in preventing cartilage degeneration in KOA. The Western Ontario and McMaster Universities Osteoarthritis Index (WOMAC) scores, encompassing pain, stiffness, and joint function subscales as primary endpoints, showed significant improvement at 12 weeks post-AlloJoin treatment, with sustained benefits observed through 48 weeks. Secondary endpoint assessments using magnetic resonance imaging (MRI) with 3D-SPGR sequences to measure total knee cartilage volume at 48 weeks indicated a trend toward increase compared to baseline (Week 0). Based on these clinical findings, the Investigational New Drug (IND) application submitted by CBMG to China’s National Medical Products Administration (NMPA) has recently been approved, advancing the Phase II clinical trial of allogeneic stem cell therapy for KOA.

Cibiman Completes Two Rounds of Financing:

(a) Cyling Capital, a global private equity firm from China, completed a $30.6 million investment in Cell Therapy Group;

(b) As part of its collaboration with CytoMed, Novartis made a $40 million equity investment in the company.

Initiation of a Phase I Clinical Study of CD22-Targeted Therapy in Patients with Relapsed CD19+ Acute Lymphoblastic Leukemia

Initiation of a Phase I Clinical Study in Patients with CD19-Negative Relapsed Non-Hodgkin Lymphoma (NHL) Targeting CD20

Launch of Phase I Clinical Study of NKG2D in Patients with Acute Myeloid Leukemia (AML)

Initiation of Phase I Clinical Study of AFP-TCR for Hepatocellular Carcinoma (HCC) in the United States and China

Initiation of Phase I Clinical Studies of TIL in Non-Small Cell Lung Cancer (NSCLC) in the United States and China

Cash: As of December 31, 2018, liquid assets totaled $52.8 million, representing an increase of $31.2 million compared to December 31, 2017. This growth was primarily driven by investments from Sail Capital and Novartis.

Revenue: Incurred ancillary fees from microservices, while concentrating resources on drug research and development.

R&D Expenses: R&D expenses were $24.2 million in 2018, compared with $14.6 million in 2017. The increase was driven by the advancement of R&D activities and pipeline expansion, as well as higher costs related to clinical trials, manufacturing, and personnel.

Net Loss: The net loss was $38.9 million in 2018, compared to $25.5 million in 2017.