Cellular Biomedicine Group's (CBMG) CEO Tony Liu on Q4 2019 Results - Earnings Call Transcript
Cellular Biomedicine Group, Inc. (NASDAQ:CBMG) Q4 2019 Earnings Conference Call February 28, 2020 4:30 PM ET
Derrick Li – Head-Strategy and Investor Relations
Tony Liu – Chief Executive Officer and Chief Financial Officer
Conference Call Participants
Madhu Kumar – Baird
Greetings. Welcome to the Cellular Biomedicine Group Fourth Quarter 2019 Earning Results Conference Call. [Operator Instructions] Please note, this conference is being recorded.
I would now like to turn the conference over to your host Derrick Li, Head of Strategy and Investor Relations. Thank you. You may begin.
Good afternoon and thank you to everyone for joining us today. Speaking today is Cellular Biomedicine Group’s Chief Executive Officer and Chief Financial Officer, Tony Liu. After he completes his fourth quarter 2019 annual update, we will open the call to questions.
Please note that some of the information you’ll hear during our discussion today will consist of forward-looking statements including without limitation those regarding revenue, gross margin, operating expenses, other income and expenses, taxes, capital allocation, timing and outcome of clinical trials and approvals, future operational changes and future business outlook. Actual results or trends could differ materially from our forecast. For more information, please refer to the risk factors discussed in CBMG’s most recently filed current report on Form 10-K and Form 10-Q. Cellular Biomedicine Group assumes no obligation to update any forward-looking statement or information, which speak as of their respective dates.
I’d now like to turn the call over to Tony for introductory remarks.
Tank you, Derrick and thank you everyone for joining us today. 2019 was an exciting year for Cellular Biomedicine Group. We are expanding our footprint in Maryland. We are renovating a 22,000 square foot facility in Rockville. This expansion is to further expand our research and development capabilities and to support clinical development in the U.S. We plan to move into the new facility in the late Q3.
On the immuno-oncology, or IO side, we achieved four major milestones. First, we initiated patient recruitment for our study on anti-BCMA CAR T therapy for relapsed or refractory multiple myeloma in China. We presented initial safety and efficacy data at the Annual Conference of American Society of Hematology, or ASH, in December. We showed a clinical data of five patients. All five showed a clinical improvement as early as two weeks post infusion.
The early results support our findings from preclinical research and we are cautiously optimistic that the drug would show meaningful therapeutic index after we accumulate more data. The very early clinical efficacy signal at low and sub-optimal dosing is encouraging, but it needs to be confirmed. We will continue to enroll more patients although it will be at a slower rate due to the coronavirus and we will monitor and evaluate the duration of response and we’ll continue to evaluate the data as it becomes available.
Secondly, we have started to evaluate anti-CD19 CD20 BiCar in relapsed-refractory non-Hodgkins Lymphoma or R/R NHL patients in China. Based on the clinical signal, we may consider clinical development of the assay U.S., if we believe there is a clear competitive edge. Thirdly, we dosed our first HCC patient with alpha-fetoprotein T cell Receptor or AFP-TCR-T in China. China has almost 0.5 million of new liver cancer patients each year. Finally, we initiated our study for Anti-CD20 CAR-T targeting previously anti-CD19 CAR-T-treated relapsed diffuse large B-Cell lymphoma or DLBCL patients in China.
Regarding our tumor infiltrating lymphocytes or TIL asset, we’re planning to launch our U.S. study in non-small cell lung cancer patients that are refractory or relapsed after IO treatment in collaboration with leading principal investigator and the partner medical center. Indeed, 2019 provide us a good start on the IO pipeline try to obtain proof of concept to migrate toward IND filings. We’re continuing to advance our drug candidates, both in China and the U.S.
Regarding our regenerative medicine pipeline, we launched our Phase 2 multicenter trial in China on off-the-shelf allogeneic human adipose-derived mesenchymal progenitor cell or haMPC as a potential therapy for knee osteoarthritis or KOA and we plan to advance the autologous KOA multicenter Phase 2 trial in Q2 this year.
We ended the year with $32.4 million in cash, cash equivalent and restricted cash, compared with $52.8 million for 2018. And last month, we secured a $16 million bridge loan to show up our balance sheet. We have $14.3 million in short-term debt and compared to none for 2019. Our net cash used in operating activities with $39.6 million compared to $25.1 million for 2018. The year-over-year increase was for research and development.
As you’re aware, since December of last year there has been an ongoing global outbreak of coronavirus disease or COVID-19. It began in Wuhan, China and has spread rapidly. The situation has already impacted CBMG as is still good. We have had a slowdown in the recruitment of our patients for all of our studies as the hospital system in China has adjusted quickly to deal with the challenges surrounded COVID-19. We anticipate a slowdown in patient recruitment for clinical study. The full extent to which the coronavirus will negatively impact our business, operations and results is highly uncertain and cannot be accurately predicted. We’re committed to supporting the communities in which we operate and have recently collaborated with Shanghai Ruijin Hospital to provide human mesenchymal stem cell exosomes to treat severe novel coronavirus caused pneumonia in their clinical trial.
Overall Cellular Biomedicine Group has continued to progress on both the clinical and operating – operational side of our business. We’re continuing to execute our vision to build a global platform capable of research and development, and manufacturing innovative cell therapies to benefit patients. Cell therapy has been embraced by both start-ups and large pharmas with clear clinical benefits provided to patients globally. CBMG intends to leverage our internal capabilities namely robust vein-to-vein integrated biopharma capabilities as well as external collaborations to bring therapies to the patients and help cure cancer.
With that, I will turn you back to Derrick, opening our discussion for any questions you may have for us.
[Operator Instructions] Our first question comes from the line of Madhu Kumar with Baird. Please proceed with your question.
Yes, thanks for taking our questions. So thinking about the cadence of news flow for 2020. So you have a dataset in myeloma, you have a dataset kind of emerging with the BiCar, the HCC program the CD20 program, when might we expect kind of – result kind of to build from these clinical studies as they progress through the year?
Hey, Madhu, great question. This is Tony. I think as I stated earlier, the coronavirus is going to sure cause probably a short delay, but after that I expect us to be thoroughly focused to continue enroll patients for all these studies. In fact we have plans lined up already to execute the minute when we see improvement in the overall environment where we have been working with the PIs and hospitals and we intend to enroll more – signing more patients – more PIs, more hospitals. So I think that we should see starting some data by mid-year or later second half of the year for these programs.
Okay then thinking about the U.S. non-small cell lung cancer TIL trial. To what extent is that trial’s design similar to an earlier non-small cell lung cancer TIL trial that was performed out of the Moffitt Cancer Center and what are your expectations for kind of the cadence of data flow from your non-small cell TIL trial?
Great question, Madhu. Our approach, we always believe in TIL technology. We have started this almost a year and a half ago in terms of product development and we have – we’ve got a Tier 1 or 2 strategy. Tier 1 would be similar to what the studies have been done previously but we’re going to improve the manufacturing process on it. And Tier 2 is pretty much based on what we call biomarker based selection or selection based. And where you selected those T-cells based on the biomarker, then expand it and in the public situation, you would expect that with lower sales but more specific from the target killing perspective.
In terms of the development clinical aspect of it, it’s only for Tier 1 we are trying to stay similar with the exception of process improvement from what has been done before. So we are – our goal and target is to put things together and our manufacturing capacity or capability will be ready by Q3. Hopefully after that, we are aiming to prepare for IND filing in the U.S.
Okay, great. Thanks for taking our question.
Our next question comes from the line of Amanda Murphy with BTIG. Please proceed with your question.
Hi, Tony. Hi team, this is [indiscernible] calling in for Amanda Murphy. I have two questions and the first one has to do with the Novartis collaboration on Kymriah. I was wondering if you could give us a status update on that collaboration. And then the second question I heard Tony just talk about a pilot study on mesenchymal stem cells, stem cell exosomes treating the novel coronavirus. And I was wondering if you could expand on that. Give us some insight into this work and where it could go over the course of the year? Thank you.
Thank you. Great questions. First one about our collaboration with Novartis. Certainly, so far everything has been extremely based on our, both sides as strategy project plans. So that has been going well and I have confidence that Novartis and CBMG are working together. We, in fact, even during this outbreak, the minute when the office start to open and employees come to – start to come to work and we already ensure the Novartis partnership or the project continue as top priority. So everything is going well over there. I’m very pleased with the progress.
With respect to the study I just mentioned with Ruijin Hospital using the stem cell derived from the exosomes technology perspective. This is really put together and over the past three weeks, four weeks, if you will and I think that certainly we’re trying to do everything we can to expedite the process and as of this minute you already from the going through all the necessary from approval perspective, we are already manufactured some materials needed. And I think they are going to process hopefully in a matter of weeks and will be in the study – in from the in human study. So I expect that should be starting while we got investigator initial studies trials not for IND at this stage. But we’re eager and excited, but at the same time I am extremely cautious about, as you know, this is only a long shot. I wouldn’t try to say this is a big step anybody with high expectation. Certainly, we are pleased with the response and the team were able to put together work with Ruijin Hospital will provide manufacturing capabilities for that.
Since we have no further questions left in the queue, I would like to turn the floor back over to Mr. Derrick Li for any closing remarks.
Thank you so much for everyone’s time. And if there are any additional questions, you can reach me on email@example.com. Thank you so much.
This concludes today’s teleconference. You may now disconnect your lines at this time. Thank you for your participation and have a wonderful day.
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