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Cellular Biomedicine Group Inc (CBMG)
Q1 2020 Earnings Call
May 6, 2020, 5:00 p.m. ET
Contents:
- Prepared Remarks
- Questions and Answers
- Call Participants
Prepared Remarks:
Operator
Ladies and gentlemen, thank you for standing by, and welcome to the Cellular Biomedicine Group, Inc. First Quarter 2020 Results Conference Call. [Operator Instructions] After the speaker presentation, there will be a question-and-answer sessison. [Operator Instructions]
It is now my pleasure to introduce Head of Strategy, Investor Relations, Derrick Li.
Derrick C. Li -- Head of Strategy and Investor Relations
Good afternoon, and thank you to everyone joining us this evening. Speaking today is Chief Executive Officer and Chief Financial Officer of Cellular Biomedicine Group, Tony Liu. After he completes his quarterly update, we will open the call to questions.
Please note that some of the information you will 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 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 periodic reports on Form 10-K and Form 10-Q. Cellular Biomedicine Group assumes no obligation to update any forward-looking statements or information, which speak as of their respective dates.
I'd now like to turn the call over to Tony for introductory remarks.
Tony Liu -- Executive Director, Chief Executive Officer, and Chief Financial Officer
Thank you, Derrick. Thank you to everyone joining us today. The world has changed quite a bit since our last conference call. The age of novel coronavirus, or COVID-19 has dominated the minds and hearts of every person on this planet, and our prayers are going out to those who are sick and the family members who have lost loved ones. I believe that this new paradigm will see the coming together of the global biotechnology industry in helping to support the development of novel vaccines and therapeutics to combat this terrible disease.
Although CBMG was off to a bumpy start with the onset of the coronavirus hitting China throughout February and March conditions have improved significantly and we are happy to report that we're back to nearly full capacity on our operations in China. And then, we hope to have our Gaithersburg, Maryland research and development facility back to normalcy when the state and local government's stay at home directives are lifted. We have taken the proper precautions and have stepped up our protocols to protect our people and facilities from the infection. We're consistently monitoring symptoms and have put in place measures to combat potential condition. Overall, this first quarter was productive for both our clinical and manufacturing teams.
Let me start by applauding their hard work and commitment. I'll point out that our manufacturing team has been very productive in continuing our process development efforts across all of our targets and continuing to make sure -- make great progress for our new facility in Rockville, Maryland. The first program that I will provide an update on is our anti-B-cell maturation antigen or BCMA CAR-T to treat patients suffering from relapsed or refractory multiple myeloma. We're excited to announce that the National Medical Products Administration, or NMPA, of China accepted our Investigational New Drug application for clinical trial, which means that we will be soon moving the study from Investigator Initial Trials [Phonetic] or IIT, to a formal clinical trial, an IND.
Additionally, in our current IIT trial, we're happy to report that we have now infused 19 patients, with only one patient being observed to have a grade 3 CRS. Overall, the observed data has given us greater confidence to continue clinical development. We believe that this early signal of safety and efficacy will give us a unique competitive advantage when combined with our bespoke manufacturing advantages, where we have shown a markedly reduced vein-to-vein time. We will continue to develop this program and update everybody as we make progress. A second program that I'd like to highlight is our anti-CD19/CD20 BiCAR, which treats non-Hodgkin's lymphoma, or NHL, mainly in diffuse large B-cell lymphoma, or DLBCL patients. To date, we have infused four patients and are optimistic of the early signal of safety and efficacy.
With the support of our new Rockville, Maryland facility, we plan to explore feasibility for two US clinical trials, namely the anti-CD20/CD19 bispecific CAR-T for non-Hodgkin's lymphoma and the tumor infiltrating lymphocyte, or TIL platform, for non-small cell lung cancer. Barring another setback from the COVID-19 pandemic, the Rockville facility should be ready in Q4 this year. We ended the quarter with $21.6 million in cash compared with $15.4 million in cash as of the end of 2019. Our net cash used in operating activities this quarter totaled $9.7 million compared to $7.9 million for the first quarter of 2019. We executed a bridge loan of $16 million in Q1 and recently obtained approval of a line of credit for approximately $4.2 million.
We continue to seek additional funding sources to boost our balance sheet to support our clinical development. While we do not expect COVID-19 to materially impact our ability to maintain liquidity and secure additional capital resources, we cannot predict the actual impact given the rapidly evolving global situation. Overall, we continue to progress on both the clinical and operational size of our business and are continuing to execute our vision, to build a global platform capable of researching, developing and manufacturing involving cell therapies to benefit patients.
With that, I'll turn you back to Derrick, opening our discussion for any questions you may have for us.
Questions and Answers:
Derrick C. Li -- Head of Strategy and Investor Relations
Thank you, Tony. Let's take the first questions. The first question will be from Madhu Kumar from R.W. Baird.
Madhu Kumar -- R.W. Baird -- Analyst
Hey. Thanks for taking our questions. So the first one is, you mentioned that you have data from patients for your multiple myeloma trial. Can you give us a sense of what kind of efficacy signals you're seeing so far and when you would expect to present this data at a public forum?
Tony Liu -- Executive Director, Chief Executive Officer, and Chief Financial Officer
Hi, Madhu. Good afternoon. How are you?
Madhu Kumar -- R.W. Baird -- Analyst
Fine.
Tony Liu -- Executive Director, Chief Executive Officer, and Chief Financial Officer
That's a great question. I think the -- yes, so far, the -- it's only from the 19 patient infused perspective. We certainly look at the -- and comparable from the other peers in this sector, we feel confident our data looks very competitive. And so the safety profile is very good as with -- for the only one CRS. But on the other hand, from -- the patients continue to follow-up, whether three months and four months, and we've seen some patients continue to progress from the CR perspective. So we feel the drug is working well within patients as we continue to dose, from the low to mid dose. We continued to dose be higher. And we see clear -- the correlation, and that's where it gives us confidence we'll continue to move forward. Certainly as we have more data from the patient follow-up perspective, we'll look for some online opportunities. And as you know, these days, the presentation mostly -- as we deal with the COVID -- the virus globally, we'll find the next opportunity. We have the online presentation will start this year, whenever is the next opportunity.
Madhu Kumar -- R.W. Baird -- Analyst
Okay. And then when -- you mentioned this discussion in the Q about the bispecific CAR-T for CD19/CD20 showing efficacy, clinical efficacy in three out of four of the evaluable patients so far. What exactly does that mean and kind of what is the kind of response rates and kind of how would you kind of give some color on the efficacy you've seen with the BiCAR so far?
Tony Liu -- Executive Director, Chief Executive Officer, and Chief Financial Officer
Sure, sure. Well, the -- we are very excited with only limited patients available for us to evaluate with three months. But as you know, Madhu, it's only three patients with three months. It's still too early to report, and we're going to continue -- we'll actually enroll more patients as the program show a great safety profile. And early indication from the patients since treated for three months, and I think the -- it is certainly great to know that after we've seen some early results and other patients -- the patient enrollment has continued to come in, and that is a good sign. So we'll just continue monitor as we have more patients to enroll. But I can say, so far, based on the limited patients that are evaluable as three months, it looks very good from a safety perspective and the -- continuously good results. I would say, again, I caution it's very limited only from a patient perspective. However, it is a good sign we have a good start.
Madhu Kumar -- R.W. Baird -- Analyst
Okay. And then on the TIL program...
Tony Liu -- Executive Director, Chief Executive Officer, and Chief Financial Officer
And also, Madhu -- sorry, Madhu. But as I stated, we -- yeah, we now see -- feel confident with -- based on so far, we've seen. And we'll continue to develop and prepare in the clinical studies in US. Sorry, I cut you off. You were asking about TIL. Please go ahead.
Madhu Kumar -- R.W. Baird -- Analyst
Yes. So the TIL program in non-small cell lung caner, obviously, kind of on top of a lot of people's minds as the data presented by the Moffitt at the AACR presentation about last week or so. And so what are your learnings from that and how do you envision your TIL program relative to what Moffitt has pursued so far, both in terms of kind of manufacturing considerations, but also in terms of target patient populations based on the Moffitt data?
Tony Liu -- Executive Director, Chief Executive Officer, and Chief Financial Officer
That's a great question, Madhu. Yes. Overall, we are very excited, and we saw the presentation done by Moffitt. And they have done an exceptional job in my mind from the non-small cell lung cancer. As you know, by far from the data, what we heard and saw, it's just fantastic. So we are preparing this study eventually under IND in US in -- soon in US. What we're doing definitely that -- although, we don't know the details of manufacturing side of it, of what's been done at the Moffitt, we are preparing. CBMG traditionally has been very good from the -- manufacture from system as far as automation, reduce the cycle, etc.
So we are taking advantage of our strength in this area. Hopefully, 2020, we will be focusing on getting the manufacturing streamlined -- put together. As the industry knows, the challenge part of TIL is -- manufacture is one key component of the whole -- from the process perspective. So we are at the moment doing process development. But when we're ready to continue the trial study in US, that we feel very good about what the work has been in that Moffitt. And hopefully, CBMG will and -- develop our own from the TIL program perspective. The first indication will focus on the non-small cell lung cancer in the US.
Madhu Kumar -- R.W. Baird -- Analyst
Okay. But digging in a little bit, do you plan to approach it the way Moffitt did, which was to bank TILs from patients, kind of before immune checkpoint blockade and then administer it after progression or do you plan to do it, where you collect them right after the progression that has happened? Like, how do you think about what is the tumor sample population that go after? Then I guess, more specifically, based on the Moffitt data, would you look at, for example, tyrosine kinase mutant patients who generally don't do well on PD-1 blockade or like how much populations are you looking to pursue for a non-small cell lung cancer cell TIL trial based on the Moffitt data set?
Tony Liu -- Executive Director, Chief Executive Officer, and Chief Financial Officer
On that side of it, we probably would be -- certainly, in terms of specific protocols, we are still in discussions with the PI. And I think the -- in general, overall, we would be -- probably similar approach as we think that it's been working well already. And we would be -- look at what that has been done in the past from NIH and what this got, and then they have been doing at the Moffitt from a forward perspective. So as we finalize -- we're still finalizing these protocols, but one can certainly see that you learn from that and you would be more or less, from an approach perspective, similar.
And however, in manufacturing side of it, we would be putting a lot of -- emphasize in ensuring that we take advantage of the boost from -- leading from -- as far as the aging perspective, process perspective, and combine it with the learning that they have done at the Moffitt trial. And of course, from the -- using the overall -- our tool and specific practice wise, we're still finalizing. And certainly, we would do -- again, take advantage of what we have done and also for some improvements of -- or different variation, if you will, from our perspective and we'll put that in the planned trial.
Madhu Kumar -- R.W. Baird -- Analyst
Okay. And then kind of more from an operations perspective. So you mentioned the idea of looking for additional sources of cash over the next few months. So obviously, in the US, in light of everything that's happened with COVID-19, there are these kind of like small business loan programs that exist kind of issued by the government. And pardon my ignorance of not knowing as much about kind of what happened with China economically after the COVID-19 pandemic happened there. Are there equivalent programs in China that are going to -- accessible by CBMG?
Tony Liu -- Executive Director, Chief Executive Officer, and Chief Financial Officer
Great question, Madhu. Actually, we were extremely concerned when the virus outbreak happened in China. As you know, this was -- hit us most first. Then with strong measures put in place in China, that things are really under control quickly. As you know, so far in China is, there has been very good from the -- as far as the outbreak concerns. The Shanghai, from an operation perspective, will be back in normal -- new normal. From the company perspective, similarly, there are some programs available. CBMG has been very lucky, not only -- yes, as we've reported, we have some -- we have access to banks, loans perspective, interest rate is very attractive. That's why we take advantage of this small loan programs.
In addition, CBMG has been continually able to attract investors from the sector, the specialists, and to award general funds, and we have been able to attract the investors from the short-term loan perspective. Yes, we continue the -- some government encouragement. Interest rate, overall, as you know, globally has been low in China as well. So we believe that we should be able to continue to tap into -- from the short-term credit line perspective and also from the invest equity perspective. So great question, Madhu. I feel confident we'll continue to be able to leverage these and help CBMG from the -- show up the balance sheet.
Madhu Kumar -- R.W. Baird -- Analyst
Okay. Thank you so much, Tony.
Tony Liu -- Executive Director, Chief Executive Officer, and Chief Financial Officer
Thank you.
Derrick C. Li -- Head of Strategy and Investor Relations
And with that, that concludes the Q&A session for our analyst call. So thank you, again, for everyone to -- who has joined, and we look forward to updating you on our next quarter. Thank you, again.
Tony Liu -- Executive Director, Chief Executive Officer, and Chief Financial Officer
Thank you.
Operator
[Operator Closing Remarks]
Duration: 20 minutes
Call participants:
Derrick C. Li -- Head of Strategy and Investor Relations
Tony Liu -- Executive Director, Chief Executive Officer, and Chief Financial Officer
Madhu Kumar -- R.W. Baird -- Analyst
