Image source: The Motley Fool.
Cellular Biomedicine Group Inc (CBMG)
Q4 2019 Earnings Call
Feb 28, 2020, 4:30 p.m. ET
Contents:
- Prepared Remarks
- Questions and Answers
- Call Participants
Prepared Remarks:
Operator
Greetings. Welcome to the Cellular Biomedicine Group Fourth Quarter 2019 Earning Results Conference Call. At this time, all participants are in a listen-only mode. [Operator Instructions]
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.
Derrick C. Li -- Head of Strategy and Investor Relations
Good afternoon and thank you to everyone for joining us today. Speaking today in 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.
Tony (Bizuo) Liu -- Executive Director, Chief Executive Officer, Chief Financial Officer
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 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 US. 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 the clinical data for 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 [Indecipherable] index after we accumulate more data. The very early clinical efficacy signal at low and sub-optimal dose -- 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 SA US [Phonetic] 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 US study in the 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 provider 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 US.
Regarding our regenerative medicine pipeline, we launched our Phase II 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 II 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 [Indecipherable]. 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 studies. 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 Regional 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.
Questions and Answers:
Operator
At this time, we'll be conducting the question-and-answer session. [Operator Instructions] Our first question comes from the line of Madhu Kumar with Baird. Please proceed with your question.
Madhu Kumar -- Robert W. Baird & Co. -- Analyst
Yeah, 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?
Tony (Bizuo) Liu -- Executive Director, Chief Executive Officer, Chief Financial Officer
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 just 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 some data by mid-year or later, second half of the year for these programs.
Madhu Kumar -- Robert W. Baird & Co. -- Analyst
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?
Tony (Bizuo) Liu -- Executive Director, Chief Executive Officer, Chief Financial Officer
So 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 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 [Phonetic] 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.
Madhu Kumar -- Robert W. Baird & Co. -- Analyst
Okay, great. Thanks for taking our question.
Tony (Bizuo) Liu -- Executive Director, Chief Executive Officer, Chief Financial Officer
Thank you.
Till -- BTIG -- Analyst
Our next question comes from the line of Amanda Murphy with BTIG. Please proceed with your question. Hi, Toni. Hi team, this is Till Sanetti Collier [Phonetic] 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 cell but 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.
Tony (Bizuo) Liu -- Executive Director, Chief Executive Officer, Chief Financial Officer
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 -- starting to come to work and we already ensure the Novartis partnership or the project continue as top priority. So everything going well over there. I'm very pleased with the progress. With respect to the study I just mentioned with Ruijin Hospital, 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 even [Phonetic] 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.
Till -- BTIG -- Analyst
Thank you.
Operator
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.
Derrick C. Li -- Head of Strategy and Investor Relations
Thank you so much for everyone's time and if there are any additional questions, you can always [Technical Issues]. Thank you so much.
Operator
[Operator Closing Remarks]
Duration: 16 minutes
Call participants:
Derrick C. Li -- Head of Strategy and Investor Relations
Tony (Bizuo) Liu -- Executive Director, Chief Executive Officer, Chief Financial Officer
Madhu Kumar -- Robert W. Baird & Co. -- Analyst
Till -- BTIG -- Analyst
