Blueprint
As filed with the Securities and Exchange Commission on October 10,
2018
Registration No. 333-
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
Cellular Biomedicine Group, Inc.
(Exact name of registrant as specified in its charter)
Delaware
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86-1032927
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(State or other jurisdiction of
incorporation or organization)
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(I.R.S. Employer
Identification Number)
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19925 Stevens Creek Blvd., Suite 100
Cupertino, CA 95014
(408) 973-7884
(Address, including zip code, and telephone number, including area
code, of registrant’s principal executive
offices)
Tony Liu, Chief Executive Officer
19925 Stevens Creek Blvd., Suite 100
Cupertino, CA 95014
(408) 973-7884
(Name, address, including zip code, and telephone number, including
area code, of agent for service)
Copies to:
Barry I. Grossman, Esq.
Sarah E. Williams, Esq.
Ellenoff Grossman & Schole LLP
1345 Avenue of Americas
New York, NY 10105
(212) 370-1300
Fax: (212) 370-7889
Approximate date of commencement of proposed
sale to the public: From time to time after the effective
date of this Registration Statement.
If the
only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check
the following box: ☐
If any
of the securities being registered on this Form are to be offered
on a delayed or continuous basis pursuant to Rule 415 under the
Securities Act of 1933, as amended, other than securities offered
only in connection with dividend or interest reinvestment plans,
check the following box: ☒
If this
Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the
following box and list the Securities Act registration statement
number of the earlier effective registration statement for the same
offering: ☐
If this
Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the
Securities Act registration statement number of the earlier
effective registration statement for the same offering.
☐
If this
Form is a registration statement pursuant to General Instruction
I.D. or a post-effective amendment thereto that shall become
effective upon filing with the Commission pursuant to Rule 462(e)
under the Securities Act, check the following box. ☐
If this
Form is a post-effective amendment to a registration statement
filed pursuant to General Instruction I.D. filed to register
additional securities or additional classes of securities pursuant
to Rule 413(b) under the Securities Act, check the following box.
☐
Indicate by check
mark whether the Registrant is a large accelerated filer, an
accelerated filer, a non-accelerated filer, or a smaller reporting
company. See the definitions of “large accelerated
filer,” “accelerated filer” and “smaller
reporting company” in Rule 12b-2 of the Exchange
Act.
Large
accelerated filer
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☐
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Accelerated
filer
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☒
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Non-accelerated
filer
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☐
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Smaller
reporting company
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☐
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|
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Emerging
Growth Company
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☐
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If an
emerging growth company, indicate by check mark if the registrant
has elected not to use the extended transition period for complying
with any new or revised financial accounting standards provided
pursuant to Section 7(a)(2)(B) of Securities Act. ☐
CALCULATION OF REGISTRATION FEE
Title of Each
Class of
Securities to be
Registered
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Amount
to
be
Registered(1)(2)
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Proposed
Maximum
Aggregate
Offering
Price
per
Security(1)(2)
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Proposed
Maximum
Aggregate
Offering
Price(2)
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Amount
of
Registration
Fee
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Common Stock, par
value $0.001 per share
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1,458,257
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$17.47
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$25,475,750
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$3,088
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(1)
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Pursuant
to Rule 416 of the Securities Act of 1933, as amended (the
“Securities Act”), the shares of common stock offered
hereby also include such presently indeterminate number of shares
of the registrant’s common stock as a result of stock splits,
stock dividends or similar transactions.
|
(2)
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Estimated
solely for the purpose of calculating the registration fee for the
secondary offering, pursuant to Rule 457(c) under the Securities
Act, based on the average of the high and low prices of the
Registrant’s Common Stock on The NASDAQ Global Market on
October 8, 2018.
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The Registrant hereby amends this Registration Statement on such
date or dates as may be necessary to delay its effective date until
the Registrant shall file a further amendment which specifically
states that this Registration Statement shall thereafter become
effective in accordance with Section 8(a) of the Securities Act of
1933, as emended, or until this Registration Statement shall become
effective on such date as the Commission, acting pursuant to said
Section 8(a), may determine.
The information in this prospectus is not complete and may be
changed. We may not sell the securities until the Registration
Statement filed with the Securities and Exchange Commission, of
which this prospectus is a part, is effective. This prospectus is
not an offer to sell these securities and is not soliciting an
offer to buy these securities in any state where the offer or sale
is not permitted.
SUBJECT TO COMPLETION, DATED OCTOBER 10, 2018
PROSPECTUS
Up to
1,458,257 Shares of Common Stock
This
prospectus relates to the resale of up to 1,458,257 shares (the
“Shares”) of our common stock, par value $.001 per
share of Cellular Biomedicine Group, Inc., a Delaware corporation,
for sale by the selling stockholder named herein for its own
account. The shares to be sold by the selling stockholder represent
shares purchased by Novartis Pharma AG (“Novartis”)
pursuant to that certain Share Purchase Agreement (the
“Purchase Agreement”), dated as of September 25,
2018.
To the
extent the selling stockholder wishes to sell its shares of our
common stock as provided for herein, it may offer and sell such
shares on a continuous or delayed basis in the future. These sales
may be conducted in the open market or in privately negotiated
transactions and at market prices, fixed prices or negotiated
prices. We will not receive any of the proceeds from the sale of
the Shares. See “Use of Proceeds” on page 17. We have
agreed to pay the expenses in connection with the registration of
the Shares.
Our
common stock is listed on The NASDAQ Global Market under the symbol
“CBMG.” The last reported sale price of our common
stock on October 9, 2018 was $17.59.
Investing
in our securities involves a high degree of risk. You should review
carefully the risks and uncertainties described under the heading
“Risk Factors” beginning on page 16, and under similar
headings in the other documents that are incorporated by reference
into this prospectus or any prospectus supplement before making a
decision to purchase our securities.
Neither
the Securities and Exchange Commission nor any state securities
commission has approved or disapproved of these securities or
determined if this prospectus is truthful or complete. Any
representation to the contrary is a criminal offense.
The date of this prospectus
is ,
2018.
TABLE OF CONTENTS
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Page
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Cautionary
Note Regarding Forward-Looking Statements
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ii
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Prospectus
Summary
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1
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The
Offering
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15
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Risk
Factors
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16
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Use of
Proceeds
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17
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Determination
of Offering Price
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17
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Selling
Stockholder
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18
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Plan of
Distribution
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19
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Description
of Securities to be Registered
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21
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Legal
Matters
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22
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Experts
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22
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Where
You Can Find Additional Information
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22
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Incorporation
of Documents by Reference
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23
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Disclosure
of Commission Position of Indemnification For Securities Law
Violations
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24
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You
should rely only on the information we have provided or
incorporated by reference in this prospectus or in any prospectus
supplement. We have not authorized anyone to provide you with
information different from that contained or incorporated by
reference in this prospectus or in any prospectus
supplement.
You
should assume that the information contained in this prospectus and
in any prospectus supplement is accurate only as of their
respective dates and that any information we have incorporated by
reference is accurate only as of the date of the document
incorporated by reference, regardless of the time of delivery of
this prospectus or any prospective supplement or any sale of
securities.
In
this prospectus, we rely on and refer to information and statistics
regarding our industry. We obtained this statistical, market and
other industry data and forecasts from publicly available
information. While we believe that the statistical data, market
data and other industry data and forecasts are reliable, we have
not independently verified the data.
CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS
This
prospectus and any accompanying prospectus supplement and the
documents we have filed or will file with the "Securities and
Exchange Commission" that are or will be incorporated by reference
into this prospectus and the accompanying prospectus supplement
contain forward-looking statements, within the meaning of Section
27A of the Securities Act and Section 21E of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), that involve
risks and uncertainties. Any statements contained, or incorporated
by reference, in this prospectus and any accompanying prospectus
that are not statements of historical fact may be forward-looking
statements. When we use the words “anticipate,”
“believe,” “could,” “estimate,”
“expect,” “intend,” “may,”
“plan,” “predict,” “project,”
“will” and other similar terms and phrases, including
references to assumptions, we are identifying forward-looking
statements. Forward-looking statements involve risks and
uncertainties which may cause our actual results, performance or
achievements to be materially different from those expressed or
implied by forward-looking statements.
A
variety of factors, some of which are outside our control, may
cause our operating results to fluctuate significantly. They
include:
●
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overall
economic and business conditions;
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the
demand for our products and services;
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●
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competitive
factors in the market in which we compete;
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●
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the
emergence of new technologies which compete with our product and
service offerings;
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●
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our
cash position and cash burn rate;
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●
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other
capital market conditions, including availability of funding
sources;
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●
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the
strength of our intellectual property portfolio; and
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●
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changes
in government regulations in China and in the U.S. related to
our industries.
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The
foregoing does not represent an exhaustive list of risks that may
impact upon the forward-looking statements used herein or in the
documents incorporated by reference herein. Please see “Risk
Factors” in this prospectus, in our reports filed with the
SEC and in any prospectus supplement related to this prospectus for
additional risks that could adversely impact our business and
financial performance. Moreover, new risks regularly emerge and it
is not possible for our management to predict all risks, nor can we
assess the impact of all risks on our business or the extent to
which any risk, or combination of risks, may cause actual results
to differ from those contained in any forward-looking statements.
All forward-looking statements included in this prospectus and any
accompanying prospectus supplement are based on information
available to us on the date hereof or thereof. Except to the extent
required by applicable laws or rules, we undertake no obligation to
publicly update or revise any forward-looking statement, whether as
a result of new information, future events or otherwise. All
subsequent written and oral forward-looking statements attributable
to us or persons acting on our behalf are expressly qualified in
their entirety by the cautionary statements contained throughout
(or incorporated by reference in) this prospectus, any accompanying
prospectus and the documents we have filed with the
SEC.
PROSPECTUS SUMMARY
The following summary highlights selected information contained or
incorporated by reference in this prospectus. This summary does not
contain all of the information you should consider before investing
in the securities. Before making an investment decision, you should
read the entire prospectus and any supplement hereto carefully,
including the risk factors section as well as the financial
statements and the notes to the financial statements incorporated
herein by reference.
In this prospectus and any amendment or supplement hereto, unless
otherwise indicated, the terms “Cellular Biomedicine Group,
Inc.,” “CBMG,” the “Company,”
“we,” “us,” and “our” refer and
relate to Cellular Biomedicine Group, Inc. and its consolidated
subsidiaries.
Overview
Cellular
Biomedicine Group, Inc. is a clinical stage biopharmaceutical
company, principally engaged in the development of therapies for
cancer and degenerative diseases utilizing proprietary cell-based
technologies. Our technology includes two major platforms: (i)
Immune cell therapy for treatment of a broad range of cancer
indications comprised of technologies in Chimeric Antigen Receptor
modified T cells ("CAR-T"), T-Cell Receptor ("TCR"), and (ii) human
adipose-derived mesenchymal progenitor cells ("haMPC") for
treatment of joint diseases. CBMG’s Research &
Development facilities are based in Gaithersburg, Maryland and
Shanghai, China, and its manufacturing facilities are based in
China in the cities of Shanghai, Wuxi, and Beijing.
We
are focused on developing and marketing safe and effective
cell-based therapies based on our cellular platforms, to treat
cancer and orthopedic diseases. We have developed proprietary
technologies and know-hows in our cell therapy platforms. We are
conducting clinical studies in China with our stem cell based
therapies to treat knee osteoarthritis (“KOA”). We have
completed a Phase IIb autologous haMPC KOA clinical study and
published its promising results. Led by Shanghai Renji Hospital,
one of the largest teaching hospitals in China, we have completed a
Phase I clinical trial of our off-the-shelf allogeneic haMPC
(AlloJoin™) therapy for treating KOA patients. We have
completed and presented the Allojoin™ Phase I 48-week data in
China and have met with the China Food and Drug Administration
(“CFDA”) in a pre-IND meeting to discuss methods to
potentially enhance development.
Our
primary target market is China. We believe that our cell-based
therapies will be able to help patients with high unmet medical
needs. We expect to carry out clinical studies leading to the
eventual CFDA approval of our products through Biologics License
Application ("BLA") filings and authorized clinical centers
throughout Greater China.
We
have launched clinical trials using our CAR-T products
in B-cell non-Hodgkin lymphoma ("NHL"). Diffuse large
B-cell lymphoma (“DLBCL”) and adult acute lymphoblastic
leukemia (“ALL”). We may also establish partnerships
with other companies for co-development in CAR-T, TCR-T and stem
cell based therapies. We are striving to build a highly competitive
research and development function, a translational medicine unit,
along with a well-established cellular manufacturing capability and
ample capacity, to support the development of multiple assets in
multiple indications. These efforts will allow us to boost the
Company's Immuno-Oncology presence and pave the way for additional
future partnerships.
Corporate History
Headquartered
in Cupertino, California, the Company is a Delaware
biopharmaceutical company focused on developing treatment for
cancer and orthopedic diseases for patients in China. The Company
started its regenerative medicine business in China in 2009 and
expanded to CAR-T therapies in 2014.
Recent Developments
On
January 3, 2017, we announced the signing of a ten-year lease
of an 113,038-square foot building located in the
“Pharma Valley” in Shanghai Zhangjiang High-Tech Park.
The new facility designed and built to GMP standards has
approximately 40,000 square feet dedicated to advanced cell
manufacturing. We invested approximately $10 million to
transform the Zhangjiang GMP facility and leasehold improvement. At
the end of 2017, the combination of new Zhangjiang facility, an
expanded Wuxi, and Beijing facilities, have an aggregate of
approximately 70,000 square feet for cell manufacturing. The
Company expects that it will be capable of supporting clinical
trials for five different CAR-T and stem cell products
simultaneously, or the ability to produce products to
treat approximately 10,000 cancer patients and 10,000 KOA
patients per year. To reach this capacity, we continue to
acquire talented scientists and technicians with relevant
experience and will continue to expand our equipment acquisition by
earmarking $3.4 million in systems and equipment
purchases.
On
January 9, 2017, we announced the commencement of patient
enrollment in China for our CALL-1 (“CAR-T against Acute
Lymphoblastic Leukemia”) Phase I clinical trial of CD19 CAR-T
therapy utilizing our optimized proprietary C-CAR011 construct for
the treatment of patients with relapsed or refractory (r/r) CD19+
B-cell ALL. We have been enrolling patients and working with the
China Center for Drug Evaluation (“CDE”) of the CFDA to
obtain approval of the Company’s IND application.
On
May 15, 2017, we announced the addition of a new independent
Phase I clinical trial of the Company’s ongoing CARD-1 study
in patients with chemorefractory or refractory B cell Non-Hodgkin
Lymphoma ("NHL"). The Company and Shanghai Tongji Hospital are
conducting a single arm, non-randomized study to evaluate the
safety and efficacy of C-CAR011 (Anti-CD19 single-chain variable
fragment (scFv) (41BB-CD3zeta)) therapy in relapsed or refractory B
cell NHL patients. We have been enrolling patients and working with
CDE to obtain approval of the Company’s IND
application.
On
June 1, 2017, we announced that our Board of Directors approved a
stock repurchase program (the “2017 Share Repurchase
Program”) granting the Company authority to repurchase up to
$10 million in common shares through open market
purchases pursuant to a plan adopted in accordance with Rule 10b5-1
and Rule 10b-18 of the Securities Exchange Act of 1934, as amended
(the “Exchange Act”). The program contemplated
repurchases of shares of the Company’s common stock in the
open market in accordance with all applicable securities laws and
regulations. From June 2017 to June 2018 the Company repurchased a
total of 560,768 shares at a total price of $6,513,993, or an
average of $11.62 per share.
On
June 20, 2017, we announced the establishment of an External
Advisory Board and the appointment of Michael A. Caligiuri, MD,
then President of the AACR and director of The Ohio State
University Comprehensive Cancer Center and CEO of the Arthur G.
James Cancer Hospital and Richard J. Solove Research Institute in
Columbus, Ohio, as Chair of the External Advisory Board to bring
together experts from diverse disciplines to provide knowledge and
insight to help CBMG fulfill its mission and build a network for
development opportunities. Dr. Caligiuri is president of City of
Hope National Medical Center and physician-in-chief.
On
June 26, 2017, we announced the appointment of Dr. Xia Meng as
Chief Operating Officer for the Company. On February 6, 2018,
driven by the Company’s strategic move to expand its business
operations in early diagnosis and cancer intervention, Meng Xia
transitioned from the role of Chief Operating Officer to Head of
the Early Diagnosis & Intervention for the
Company.
On
November 4, 2017, we announced the grand opening of our Zhangjiang
facility. On the same day, we announced the signing of a strategic
partnership with Thermo Fisher Scientific (China) Ltd. to build a
joint Cell Therapy Technology Innovation and Application Center at
CBMG’s newly opened Shanghai Zhangjiang
facility.
On
December 28, 2017, we announced the closing of two private
placement transactions pursuant to which we sold an aggregate of
1,208,333 shares of the Company’s common stock to select key
executives and private investors at $12.00 per share, for total
aggregate gross proceeds of approximately $14.5
million.
On
January 30, 2018 and February 5, 2018, we entered into securities
purchase agreements with certain investors pursuant to which the
Company agreed to sell, and the investors agreed to purchase from
the Company, an aggregate of 1,719,324 shares (the “February
2018 Private Placement”) of the Company’s common stock,
par value $0.001 per share, at $17.80 per share, for total gross
proceeds of approximately $30.6 million. The transaction
closed on February 5, 2018. Pursuant to the purchase agreement, the
Investors have the right to nominate one director to the board of
directors of the Company to stand for election at the 2018 Annual
Meeting of Stockholders. Effective as of the closing of the
February 2018 Private Placement, Bosun S. Hau was appointed as a
non-executive Class III director of the Company and his appointment
was subsequent ratified by the shareholders during the Annual
Shareholders Meeting on April 27, 2018,
On
February 15, 2018, we obtained a 36–month exclusive option
with Augusta University to negotiate a royalty-bearing, exclusive
license to the patent rights owned by the Augusta University
relating to an invention to identify novel alpha fetoprotein
(“AFP”) specific TCR for a hepatocellular carcinoma
(“HCC”) immunotherapy. The Company is evaluating the
feasibility and opportunities of this novel alpha fetoprotein TCR
to redirect T Cells for the HCC indication. We are evaluating the
efficacy and specificity of the AFP TCR to identity the most
appropriate candidate for first time in human ("FTIH") study. In
addition, human CD8+ T cells will be redirected with the AFP TCRs
and their anti-tumor activity will be evaluated by in vitro
cytokine release assay and cytotoxicity assay. Concurrently,
potential on/off-target toxicity including allo-reactivity will
also be evaluated and the best candidate TCRs for clinical use will
be further tested in humanized mouse models. We plan to exercise
our exclusive right to license the technology from Augusta
University if and when the FTIH proof of mechanism study shows
promising clinical efficacy signal and manageable safety
profile.
On
March 16, 2018, we issued a press release announcing the
presentation of the Allojoin™ Phase I 48-week data in China,
as well as the termination of the Company’s U.S.
Allojoin™ program with CIRM to focus the clinical development
in China. Prior to termination, the Company had received $1.2
million of the potential $2.29 million available under the CIRM
grant.
On April 18, 2018 and April 21, 2018, the CFDA CDE
posted on its website acceptance of the IND application for CAR-T
cancer therapies in treating patients with NHL and ALL submitted by
two of the wholly-owned subsidiaries of the Company,
respectively. Thus far, a total of
three Chinese companies
that submitted their IND application ahead of the Company have
received approval of their IND application for CAR-T cancer
therapies.
On
June 22, 2018, the Company announced the grand opening of its new
research and development center in Gaithersburg,
Maryland.
On
September 25, 2018, the Company, together with certain of its
subsidiaries and controlled entities, entered into a License and
Collaboration Agreement (the “Collaboration Agreement”)
with Novartis pursuant to which the Company will manufacture and
supply Novartis the T CAR-T cell therapy Kymriah®
(tisagenlecleucel) (the “Product”) in China. The
Company also granted Novartis a world-wide license certain of its
intellectual property and technology, including intellectual
property and technology related to the Product. Such license is
exclusive with respect to the development, manufacture and
commercialization of the Product and non-exclusive with respect to
the development, manufacture and commercialization of other
products.
Also,
on September 25, 2018, we entered into a Share Purchase Agreement
with Novartis pursuant to which the Company agreed to sell, and
Novartis agreed to purchase from the Company, an aggregate of
1,458,257 shares of the Company’s common stock, at a purchase
price of $27.43 per share, which was the equivalent of 130% of the
volume-weighted average price of the Common Stock for the prior 20
consecutive trading days, for total gross proceeds of approximately
$40 million (the “Private Placement”). In
connection with the Private Placement, the Company and Novartis
entered into a Registration Rights Agreement (the
“Registration Rights Agreement”) pursuant to which the
Company has agreed, subject to certain conditions set forth
therein, to file a registration statement on Form S-3 or other
appropriate form to register the resale of the shares and any
securities issued or then issuable upon stock split and other
events set forth under the Registration Rights Agreement. This
registration statement on Form S-3 is being filed in order to
satisfy such registration requirement.
On
October 2, 2018, we entered into entered into a non-exclusive
license agreement with The U.S. Department of Health and Human
Services, as represented by National Cancer Institute, an Institute
or Center (the “IC”) of the National Institutes of
Health, pursuant to which the Company was granted rights to the
worldwide development, manufacture and commercialization of
autologous, tumor-reactive lymphocyte adoptive cell therapy
products, isolated from tumor infiltrating lymphocytes as claimed
in the IC licensed patent rights, for the treatment of non-small
cell lung, stomach, esophagus, colorectal, and head and neck
cancer(s) in humans.
On
October 10, 2018, we announced that we commenced a stock repurchase
program (the “2018 Share Repurchase Program”) granting
the Company authority to purchase up to $8.48 million in
common shares through open market purchases pursuant to a plan
adopted in accordance with Rule 10b5-1 and Rule 10b-18 of the
Exchange Act. The program contemplated repurchases of shares of the
Company’s common stock in the open market in accordance with
all applicable securities laws and regulations. It
is contemplated that total shares to be repurchased under the 2017
and 2018 Share Repurchase Programs shall not exceed $15 million in
the aggregate.
In
the next 12 months, we aim to accomplish the following, though
there can be no assurances that we will be able to accomplish any
of these goals:
●
Execute the technical transfer and align the manufacturing
processes with Novartis to support Novartis’ development of
the Kymriah® therapy in China;
● File Allojoin™, Rejoin™ and
KOA IND application with the CFDA’s CDE and initiate clinical
studies to support the BLA applications in China;
● Bolster R&D resources to fortify our
intellectual properties portfolio and scientific development.
Continue to develop a competitive immune cell therapy pipeline for
CBMG. Seek opportunities to file new patent applications in
potentially the rest of the world and in
China;
●
Leveraging our quality system and our strong scientific expertise
to develop a platform as preferred parties for international
pharmaceutical companies to co-develop cell therapies in China by
implementing our quality strategies and leveraging the experience
and expertise of our strong scientific team in the U.S. and in
China;
●
Continue to identify and evaluate advanced technologies and seek
partnerships to bolster our competitive edge in the cell therapy
field in China;
●
Initiate an investigator sponsored phase I trial of anti-BCMA CAR-T
in adults with relapsed/refractory multiple myeloma;
●
Implement our GE Joint Technology Laboratory’s integrated and
automated cell manufacturing system to enable robust, scalable and
cost effective processes for the manufacturing of CAR-T and Stem
Cell Therapies;
●
Implement the digital tracking system of our Thermo Fisher Joint
Cell Therapy Technology Innovation and Application Center and
develop a fully chemically-defined culture medium for improved
virus production and assess Next-Generation Sequencing (NGS)
technology to accelerate our research and development;
●
Evaluate new regenerative medicine technology platform for other
indications and review recent development in the competitive
landscape;
●
Evaluate entry into the gene therapies segment for certain rare
diseases;
●
Evaluate our corporate development strategy on maintaining the
CAR-T and regenerative medicine dual technology
platform;
●
Advance the evaluation on feasibility and opportunities of novel
Alpha Fetoprotein Specific TCR to redirect T Cells for a HCC
Immunotherapy;
●
Develop the new cancer diagnostics and intervention
business;
●
Reassess the return of investment to develop GVAX for cancer
therapeutics in the current competitive market;
●
Advance our Quality Management System (QMS), Validation
Master Plan VMP) and quality assurance
automation;
●
Advance the plan to initiate an investigator sponsored trial (IIT)
of neoantigen enriched TIL for solid tumor in China;
●
Improve liquidity and fortify our balance sheet by courting
institutional investors; and
●
Evaluate possibility of dual listing on the Hong Kong Stock
Exchange to expand investor base in Asia.
BIOPHARMACEUTICAL BUSINESS
The
biopharmaceutical business was founded in 2009 by a team of
seasoned Chinese-American executives, scientists and doctors. In
2010, we established a facility designed and built to China's Good
Manufature Practice (GMP) standards in Wuxi, China and in 2012 we
established a U.S. Food and Drug Administration (FDA) GMP standard
protocol-compliant manufacturing facility in Shanghai. In October
2015, we opened a facility designed and built to GMP standards in
Beijing. In November 2017, we opened our Zhangjiang facility in
Shanghai, of which 40,000 square feet was designed and built to GMP
standards and dedicated to advanced cell manufacturing. Our focus
has been to serve the rapidly growing health care market in China
by marketing and commercializing immune cell and stem cell
therapeutics, related tools and products from our patent-protected
homegrown and acquired cell technology, as well as by utilizing
in-licensed and other acquired intellectual
properties.
Our
current treatment focal points are KOA and cancer and we are
evaluating companion diagnostics that can benefit personalized
cancer treatment.
Cancer. We are focusing our clinical efforts on
CAR-T and TCR, and with the execution of the Novartis Collaboration
Agreement we have prioritized our efforts on working with Novartis
to bring Kymriah to patients in China as soon as practicable. In
view of our collaboration with Novartis, we will no longer pursue
our own ALL and DLBCL BLA submission with the National Medical
Products Administration (MNPA, renamed from CFDA). On the research
and development side we will endeavor to bring our CD22 HCL and
CD19 CAR-T relapsing ALL, CD 20 for CD19 CAR-T Relapsing NHL, BCMA
in Multiple Myeloma (MM), NKG2D in acute myeloid leukemia (AML),
AFP TCR-T in Hepatocellular carcinoma (HCC) and neoantigen enriched
TIL on solid tumors, respectively, in first in human trial as soon
as possible. We plan to continue to leverage our quality system and
our strong scientific expertise to develop a platform as preferred
parties for international pharmaceutical companies to co-develop
cell therapies with the Company in China by implementing our
quality strategies and leveraging the experience and expertise of
our strong scientific team in China and the
U.S.
KOA. In 2013, we completed a Phase I/IIa
clinical study, in China, for our KOA therapy named Re-Join®.
The trial tested the safety and efficacy of intra-articular
injections of autologous haMPCs in order to reduce inflammation and
repair damaged joint cartilage. The 6-month follow-up clinical data
showed Re-Join® therapy to be both safe and
effective.
In
Q2 of 2014, we completed patient enrollment for the Phase IIb
clinical trial of Re-Join® for KOA. The multi-center study
enrolled 53 patients to participate in a randomized, single blind
trial. We published 48 weeks follow-up data of Phase I/IIa on
December 5, 2014. The 48 week data indicated that
patients have reported a decrease in pain and a significant
improvement in mobility and flexibility, while the clinical data
shows our Re-Join® regenerative medicine treatment to be
safe. We announced the interim 24 week results for
Re-Join® on March 25, 2015 and released positive
Phase IIb 48 week follow-up data in January 2016, which shows the
primary and secondary endpoints of Re-Join® therapy group
having all improved significantly compared to their baseline, which
has confirmed some of the Company’s Phase I/IIa results. Our
Re-Join® human adipose-derived mesenchymal progenitor cell
(haMPC) therapy for KOA is an interventional therapy using
proprietary process, culture and medium.
Our
process is distinguishable from sole Stromal Vascular Fraction
(SVF) therapy. The immunophenotype of our haMPCs exhibited multiple
biomarkers such as CD29+, CD73+, CD90+, CD49d+, HLA-I+, HLA-DR-,
Actin-, CD14-, CD34-, and CD45-. In contrast, SVF is
merely a heterogeneous fraction including preadipocytes,
endothelial cells, smooth muscle cells, pericytes, macrophages,
fibroblasts, and adipose-derived stem cells.
In
January 2016, we launched the Allogeneic KOA Phase I Trial in China
to evaluate the safety and efficacy of AlloJoin™, an off-the
shelf allogeneic adipose derived progenitor cell (haMPC) therapy
for the treatment of KOA. On August 5, 2016 we completed patient
treatment for the Allogeneic KOA Phase I trial, and on December 9,
2016 we announced interim 3-month safety data from the Allogenic
KOA Phase I Trial in China. The interim analysis of the trial has
preliminarily demonstrated a safety and tolerability profile of
AlloJoin™ in the three doses tested, and no serious adverse
events (SAE) have been observed. On March 16, 2018, we announced
the positive 48-week Allojoin™ Phase I data in China, which
demonstrated good safety and early efficacy for the prevention of
cartilage deterioration. We plan to file anew the IND application
for AlloJoin™ with NMPA in the near future.
The
unique lines of adult adipose-derived progenitor cells and the
immune cell therapies enable us to create multiple cell
formulations in treating specific medical conditions and diseases.
The quality management systems of CBMG Shanghai were issued a
Certificate of ISO-9001:2015 in 2018 and to be updated to 9001:2015
in this year. (i)The cleanrooms in our new facility are ISO 14644
certified and in compliance with China’s Good Manufacture
Practice (GMP) requirement (2010 edition); (ii) the equipment in
the new Shanghai facility has been calibrated and qualified, and
the biological safety cabinets were also qualified. The quality
management systems of CBMG Wuxi were certified as meeting the
requirement of ISO-9001:2015, and the facility and equipment were
also qualified.
Our
proprietary processes and procedures include (i) banking of
allogenic cellular product and intermediate product; (ii)
manufacturing procedures of GMP-grade viral vectors; (iii)
manufacturing procedures of GMP-grade cellular product; (iv)
analytical testing to ensure the safety, identity, purity and
potency of cellular product.
Recent Developments in Cancer Cell Therapy
According
to the U.S. National Cancer Institute’s 2013 cancer topics
research update on CAR-T-Cells, excitement is growing for
immunotherapy—therapies that harness the power of a
patient’s immune system to combat their disease, or what some
in the research community are calling the “fifth
pillar” of cancer treatment.
One approach to immunotherapy involves
engineering patients’ own immune cells to recognize and
attack their tumors. This approach is called adoptive cell
transfer (ACT). ACT’s building blocks are T cells, a
type of immune cell collected from the patient’s own blood.
One of the well-established ACT approaches is CAR-T cancer therapy.
After collection, the T cells are genetically engineered to
produce special receptors on their surface called chimeric
antigen receptors (CARs). CARs are proteins that allow the T
cells to recognize a specific protein (antigen) on
tumor cells. These engineered CAR-T cells are then grown until
they number in the billions. The expanded population of CAR-T
cells is then infused into the patient. After the
infusion, if all goes as planned, the T cells multiply in
the patient’s body and, with guidance from their
engineered receptor, recognize and kill cancer cells that
harbor the antigen on their surfaces. This process builds on a
similar form of ACT pioneered from
NCI’s Surgery Branch for patients with advanced
melanoma. According to www.cancer.gov/.../research-updates/2013/CAR-T-Cells,
in 2013 NCI’s Pediatric Oncology Branch commented that
the CAR-T cells are much more potent than anything they can
achieve with other immune-based treatments being
studied. Although investigators working in this field caution
that there is still much to learn about CAR T-cell therapy,
the early results from trials like these have generated
considerable optimism.
CAR-T
cell therapies, such as anti-CD19 CAR-T and anti-BCMA CAR-T, have
been tested in several hematological indications on patients
that are refractory/relapsing to chemotherapy, and many of
them have relapsed after stem cell transplantation. All
of these patients had very limited treatment option prior
to CAR-T therapy. CAR-T has shown encouraging clinical
efficacy in many of these patients, and some of them have durable
clinical response for years. However, some adverse effects, such as
cytokine release syndrome (CRS) and neurological toxicity, have
been observed in patients treated with CAR-T cells. For example, in
July 2016, Juno Therapeutics, Inc. reported the death of
patients enrolled in the U.S. Phase II clinical trial of
JCAR015 (anti-CD19 CAR-T) for the treatment of relapsed or
refractory B cell acute lymphoblastic leukemia (B-ALL). The US
FDA put the trial on hold and lifted the hold within a
week after Juno provided satisfactory explanation and
solution. Juno believes that the patient deaths were caused by
the use of Fludarabine preconditioning and they will use only
cyclophosphamide pre-conditioning in future
enrollment.
In
August 2017, the U.S. FDA approved Novartis’ Kymriah
(tisagenlecleucel), a CD19-targeted CAR-T therapy, for the
treatment of patients up to 25 years old for relapsed or refractory
(r/r) acute lymphoblastic leukemia (ALL), the most common
cancer in children. Current treatments show a rate of 80%
remission using intensive chemotherapy. However, there
are almost no conventional treatments to help patients who have
relapsed or are refractory to traditional treatment. Kymriah
has shown results of complete and long lasting remission, and
was the first FDA-approved CAR-T therapy. In October 2017, the
U.S. FDA approved Kite Pharmaceuticals’ (Gilead) CAR-T
therapy for diffuse large B-cell lymphoma (DLBCL), the most
common type of NHL in adults. The initial results
of axicabtagene ciloleucel (Yescarta), the prognosis of
high-grade chemo refractory NHL is dismal with a medium
survival time of a few weeks. Yescarta is a therapy
for patients who have not responded to or who have relapsed
after at least two other kinds of treatment.
In
May 2018, the FDA approved Novartis’ Kymriah for intravenous
infusion for its second indication - the treatment of adult
patients with relapsed or refractory (r/r) large B-cell lymphoma
after two or more lines of systemic therapy including diffuse large
B-cell lymphoma (DLBCL) not otherwise specified, high grade B-cell
lymphoma and DLBCL arising from follicular lymphoma. Kymriah is now
the only CAR-T cell therapy to receive FDA approval for two
distinct indications in non-Hodgkin lymphoma (NHL) and B-cell ALL.
On September 25, 2018, we entered into the Collaboration Agreement
with Novartis to manufacture and supply Kymriah to Novartis in
China.
Besides
anti-CD19 CAR-Ts, anti-BCMA (b-cell maturation antigen), CAR-Ts
have shown very promising clinical outcomes in treatment of
multiple myeloma. For example, bb2121, a CAR-T therapy targeting
BCMA, has been developed by Bluebird bio, Inc. and Celgene for
previously treated patients with multiple myeloma. Based on
preliminary clinical data from the ongoing phase 1 study CRB-401,
bb2121 has been granted Breakthrough Therapy Designation by the
U.S. FDA and PRIME eligibility by the European Medicines Agency
(EMA) in November 2017.
Recent
progress in Universal Chimeric Antigen Receptor (UCAR) T-cells
showed benefits such as ease of use, availability and the drug
pricing challenge. Currently, most therapeutic UCAR products have
been developed with gene editing platforms such as CRISPR or TALEN.
For example, UCART19 is an allogeneic CAR T-cell product candidate
developed by Cellectis for treatment of CD19-expressing
hematological malignancies. UCART19 Phase I clinical trials started
in adult and pediatric patients in Europe in June 2016 and in the
U.S. in 2017. The use of UCAR may has the potential to overcome the
limitation of the current autologous approach by providing an
allogeneic, frozen, “off-the-shelf” T cell product for
cancer treatment.
While
CAR-T cell therapy has been proven successful in treatment of
several hematological malignancies, other cell therapy approaches,
including Tumor Infiltrating Lymphocytes (TIL) and T Cell Receptor
engineered T cells (TCR-Ts) are being developed to treat solid
tumors. For example, Iovance Biotherapeutics is focused on the
development of autologous tumor-directed TILs for treatments of
patients with various solid tumor
indications. Iovance is conducting four Phase 2
clinical trials to assess the efficacy and safety of autologous TIL
for treatment of patients with Metastatic Melanoma, Squamous Cell
Carcinoma of the Head and Neck, Non-Small Cell Lung Cancer (NSCLC)
and Cervical Cancer in the US and Europe.
Adaptimmune is partnering with
GlaxoSmithKline to develop TCR-T therapy targeting the NY-ESO-1
peptide, which is present across multiple cancer types. Their
NY-ESO SPEAR T-cell has been used in multiple Phase 1/2 clinical
trials in patients with solid tumors and haematological
malignancies, including synovial sarcoma, myxoid round cell
liposarcoma, multiple myeloma, melanoma, NSCLC and ovarian cancer.
The initial data suggested positive clinical responses and evidence
of tumor reduction in patients. NY-ESO SPEART T-cell has been
granted breakthrough therapy designation by the U.S. FDA and PRIME
regulatory access in Europe. Adaptimmune’s other TCR-T
product, AFP SPEAR T-cell targeting AFP peptide, is aimed at the
treatment of patients with hepatocellular carcinoma (HCC). AFP
SPEAR T-cell is in a Phase I study and enrolling HCC patients in
the U.S.
In
December 2017, the Chinese government issued trial guidelines
concerning the development and testing of cell therapy products in
China. Although these trial guidelines are not yet codified as
mandatory regulation, we believe they provide a measure of clarity
and a preliminary regulatory pathway for our cell therapy
operations in a still uncertain regulatory environment. On April 18
and April 21, 2018, the CDE posted on its website acceptance of the
IND application for CAR-T cancer therapies in treating patients
with NHL and adult ALL submitted by the Company’s
wholly-owned subsidiaries Cellular Biomedicine Group (Shanghai)
Ltd. and Shanghai Cellular Biopharmaceutical Group
Ltd.
With the acceptance of Novartis’
Kymriah U.S. FDA’s, EU’s
and Canada’s approval based on its proof
of efficacy indications
and safety data, management believes that CBMG is well positioned
and poised to help Novartis in manufacturing Kymriah for patients
in China.
Market for Stem Cell-Based Therapies
The
forecast is that in the United States, shipments of treatments with
stem cells or instruments which concentrate stem cell preparations
for injection into painful joints will fuel an overall increase in
the use of stem cell based treatments and an increase to $5.7
billion in 2020, with key growth areas being Spinal Fusion, Sports
Medicine and Osteoarthritis of the joints. According to Centers for
Disease Control and Prevention. Prevalence of doctor-diagnosed
arthritis and arthritis-attributable activity limitation United
States. 2010-2012, Osteoarthritis (OA) is a chronic disease that is
characterized by degeneration of the articular cartilage,
hyperosteogeny, and ultimately, joint destruction that can affect
all of the joints. According to Dillon CF, Rasch EK, Gu Q et al.
Prevalence of knee osteoarthritis in the United States: Arthritis
Data from the Third National Health and Nutrition Examination
Survey 1991-94. J Rheumatol. 2006, the incidence of OA is 50% among
people over age 60 and 90% among people over age 65. KOA accounts
for the majority of total OA conditions and in adults, OA is the
second leading cause of work disability and the disability
incidence is high (53%). The costs of OA management have grown
exponentially over recent decades, accounting for up to 1% to 2.5%
of the gross national product of countries with aging populations,
including the U.S., Canada, the UK, France, and Australia.
According to the American Academy of Orthopedic Surgeons (AAOS),
the only pharmacologic therapies recommended for OA symptom
management are non-steroidal anti-inflammatory drugs (NSAIDs) and
tramadol (for patients with symptomatic osteoarthritis). Moreover,
there is no approved disease modification therapy for OA in the
world. Disease progression is a leading cause of hospitalization
and ultimately requires joint replacement surgery. In 2009, the
U.S. spent over $42 billion on replacement surgery for hip and knee
joints alone. International regulatory guidelines on clinical
investigation of medicinal products used in the treatment of OA
were updated in 2015, and clinical benefits (or trial outcomes) of
a disease modification therapy for KOA has been well defined and
recommended. Medicinal products used in the treatment of
osteoarthritis need to provide both a symptom relief effect for at
least 6 months and a structure modification effect to slow
cartilage degradation by at least 12 months. Symptom relief is
generally measured by a composite questionnaire Western Ontario and
McMaster Universities Osteoarthritis Index (WOMAC) score, and
structure modification is measured by MRI, or radiographic image as
accepted by international communities. The Company uses the WOMAC
as primary end point to demonstrate symptom relief, and MRI to
assess structure and regeneration benefits as a secondary
endpoint.
According
to the Foundation for the National Institutes of Health, there are
27 million Americans with Osteoarthritis (OA), and symptomatic Knee
Osteoarthritis (KOA) occurs in 13% of persons aged 60 and older.
The International Journal of Rheumatic Diseases, 2011 reports that
approximately 57 million people in China suffer from KOA. Currently
no treatment exists that can effectively preserve knee joint
cartilage or slow the progression of KOA. Current common drug-based
methods of management, including anti-inflammatory medications
(NSAIDs), only relieve symptoms and carry the risk of side effects.
Patients with KOA suffer from compromised mobility, leading to
sedentary lifestyles; doubling the risk of cardiovascular diseases,
diabetes, and obesity; and increasing the risk of all causes of
mortality, colon cancer, high blood pressure, osteoporosis, lipid
disorders, depression and anxiety. According to the Epidemiology of
Rheumatic Disease (Silman AJ, Hochberg MC. Oxford Univ. Press,
1993:257), 53% of patients with KOA will eventually become
disabled.
Our Strategy
In
addition to the manufacturing Novartis’ Kymriah for patients
in China that is contemplated by the Collaboration Agreement and
Manufacture and Supply Agreement with Novartis, we are also
actively developing and evaluating other therapies comprised of
other CAR-T, AFP TCR-T and neoantigen enriched TIL. We plan to file
anew our KOA IND applications for Allojoin™ and Rejoin™
with the CFDA in the near future.
In
addition to our development efforts, we also actively seek
co-development opportunities with international partners. We
believe that such partnership will enable us to take advantage of
the technologies of our partners such as international
pharmaceutical companies while leveraging our quality control and
manufacturing infrastructure and further expand our pipelines in a
relatively rapid fashion.
Our
goal is to develop safe and effective cellular medicine therapies
for indications that represent a large unmet need in China, based
on technologies developed both in-house and obtained through
acquisition, licensing and collaboration arrangements with
other companies. We intend to use our first-mover advantage in
China, against a backdrop of enhanced regulation by the central
government, to differentiate ourselves from the competition and
establish a leading position in the China cell therapeutic
market. We believe that few competitors in
China are as well-equipped as we are in the clinical trial
development, diversified international standard protocol compliant
manufacturing facilities, quality assurance and control processes,
regulatory compliance vigor, as well as continuous process
improvement to speed up manufacturing timelines for its cell
therapy clinical trials and commercial launch.
In
order to expedite fulfillment of patient treatment, we have been
actively developing technologies and products with a strong
intellectual properties protection, including haMPC, derived from
fat tissue, for the treatment of KOA and other indications.
CBMG’s acquisition of a 36-month exclusive option to license
the patent rights owned by the Augusta University relating to an
invention to identify novel alpha fetoprotein specific T-cell
receptors (TCR) for a hepatocellular carcinoma (HCC) immunotherapy
provides an enlarged opportunity to expand the application of
CBMG’s cancer therapy-enabling technologies and to initiate
clinical trials with leading cancer hospitals.
Our
proprietary and patent-protected production processes enable us to
produce raw material, manufacture cells, and conduct cell banking
and distribution. Our clinical protocols include medical assessment
to qualify each patient for treatment, evaluation of each patient
before and after a specific therapy, cell transplantation
methodologies including dosage, frequency and the use of adjunct
therapies, potential adverse effects and their proper management.
Applying our proprietary intellectual property, we plan to
customize specialize formulations to address complex diseases and
debilitating conditions.
We
operate our manufacturing facilities under the design of the
standard (GMP) conditions in the ISO accredited laboratories
standard. We employ institutionalized and proprietary process and
quality management system to optimize reproducibility and to hone
our efficiency. Our Beijing, Shanghai and Wuxi facilities are
designed and built to meet international GMP standards. With our
integrated Plasmid, Viral Vectors, and CAR-T cells
Chemistry, Manufacturing, and Controls processes and expanding
capacity, we are highly distinguishable from other companies in the
cellular medicine space.
In
total, our facilities have approximately 70,000 square feet of
space and are expected to have a capacity to provide therapies that
can treat approximately 10,000 cancer patients and 10,000 patients
per year.
Most
importantly, our seasoned cell therapy team members have decades of
highly-relevant experience in the United States, China, and
European Union. We believe that these are the primary factors that
make CBMG a high quality cell products manufacturer in
China.
Our Targeted Indications and Potential Therapies
The chart below illustrates CBMG’s pipelines:
Immuno-oncology (I/o)
Our
CAR-T platform is built on lenti-virial vector and
second-generation CAR design, which is used by most of the current
trials and studies. We rigorously select the patient population for
each asset and indication to allow the optimal path forward for
regulatory approval. We also fully integrate the state of art
translational medicine effort into each clinical study to aid in
dose selection, to confirm the mechanism of action and proof of
concept, and to identify the optimal targeting patient population
whenever appropriate. We plan to continue to grow our translational
medicine team and engage key opinion leaders to meet the
demand.
Solid
tumors pose more challenges than hematological
cancers. The patients are more heterogeneous, making it
difficult to have one drug to work effectively in the majority of
the patients in any cancer indication. The duration of
response is most likely shorter and patients are likely to relapse
even after initial positive clinical response. We will
continue our effort in developing cell based therapies to target
both hematological cancers and solid tumors.
Knee Osteoarthritis (KOA)
We
are currently pursuing two primary therapies for the treatment of
KOA: our Re-Join® therapy and our
AlloJoin™ therapy.
We
completed the Phase I/IIa clinical trial for the
treatment of KOA. The trial tested the safety and efficacy of
intra-articular injections of autologous haMPCs in order to reduce
inflammation and repair damaged joint cartilage. The 6-month
follow-up clinical data showed Re-Join® therapy to be
both safe and effective.
In
the second quarter of 2014, we completed patient enrollment for the
Phase IIb clinical trial of Re-Join® for KOA. The multi-center
study has enrolled 53 patients to participate in a randomized,
single blind trial. We published 48 weeks follow-up data of Phase
I/IIa on December 5, 2014. The 48 weeks data indicated
that patients have reported a decrease in pain and a significant
improvement in mobility and flexibility, while the clinical data
shows our Re-Join® regenerative medicine treatment to be safe.
We announced positive Phase IIb 48-week follow-up data in January
2016, with statistical significant evidence that Re-Join®
enhanced cartilage regeneration, which concluded the planned phase
IIb trial.
In
January 2016, we launched the Allogeneic KOA Phase I Trial in
China to evaluate the safety and efficacy of AlloJoin™,
an off-the shelf haMPC therapy for the treatment of KOA. On August
5, 2016 we completed patient treatment for the Allogeneic KOA
Phase I trial. On August 5, 2016 we completed patient treatment for
the Allogenic KOA Phase I Trial, and on December 9, 2016, we
announced interim 3-month safety data from the Allogenic KOA Phase
I Trial in China. The interim analysis of the trial has
preliminarily demonstrated a safety and tolerability profile of
AlloJoin™ in the three doses tested, and no SAEs have been
observed. On March 16, 2018, we announced the positive 48-week
Allojoin™ Phase I data in China, which demonstrated good
safety and early efficacy for the prevention of cartilage
deterioration.
Osteoarthritis
is a degenerative disease of the joints. KOA is one of the most
common types of osteoarthritis. Pathological manifestation of
osteoarthritis is primarily local inflammation caused by immune
response and subsequent damage of joints. Restoration of immune
response and joint tissues are the objective of
therapies.
According to International Journal of
Rheumatic Diseases, 2011, 53%
of KOA patients will degenerate to the point of disability.
Conventional treatment usually involves invasive surgery with
painful recovery and physical therapy. As drug-based methods of
management are ineffective, the same journal estimates that some
1.5 million patients with this disability will degenerate to the
point of requiring artificial joint replacement surgery every year.
However, only 40,000 patients will actually be able to undergo
replacement surgery, leaving the majority of patients to suffer
from a life-long disability due to lack of effective
treatment.
Adult
mesenchymal stem cells can currently be isolated from a variety of
adult human sources, such as liver, bone marrow, and adipose (fat)
tissue. We believe the advantages in using adipose tissue (as
opposed to bone marrow or blood) are that it is one of the richest
sources of pluripotent cells in the body, the easy and repeatable
access to fat via liposuction, and the simple cell isolation
procedures that can begin to take place even on-site with minor
equipment needs. The procedure we are testing for autologous KOA
involves extracting a very small amount of fat using a minimally
invasive extraction process which takes up to 20 minutes and leaves
no scarring. The haMPC cells are then processed and isolated on
site, and injected intra articularly into the knee joint with
ultrasound guidance. For allogeneic KOA we use donor haMPC
cells.
These
haMPC cells are capable of differentiating into bone, cartilage,
tendon, skeletal muscle, and fat under the right conditions. As
such, haMPCs are an attractive focus for medical research and
clinical development. Importantly, we believe both allogeneic and
autologously sourced haMPCs may be used in the treatment of
disease. Numerous studies have provided preclinical data that
support the safety and efficacy of allogeneic and autologously
derived haMPC, offering a choice for those where factors such as
donor age and health are an issue.
Additionally,
certain disease treatment plans call for an initial infusion of
these cells in the form of SVF, an initial form of cell isolation
that can be completed and injected within ninety minutes of
receiving lipoaspirate. The therapeutic potential conferred by the
cocktail of ingredients present in the SVF is also evident, as it
is a rich source for preadipocytes, mesenchymal stem cells,
endothelial progenitor cells, T regulatory cells and
anti-inflammatory macrophages.
haMPCs
are currently being considered as a new and effective treatment for
osteoarthritis, with a huge potential
market. Osteoarthritis is one of the ten most disabling
diseases in developed countries. Worldwide estimates are that 9.6%
of men and 18.0% of women aged over 60 years have symptomatic
osteoarthritis. It is estimated that the global OA therapeutics
market was worth $4.4 billion in 2010 and is forecast to grow at a
compound annual growth rate of 3.8% to reach $5.9 billion by
2018.
In
order to bring haMPC-based KOA therapy to market, our market
strategy is to: (a) establish regional laboratories that comply
with cGMP standards in Shanghai and Beijing that meet Chinese
regulatory approval; and (b) submit to the CFDA an IND package for
Allojoin™ to treat patients with donor haMPC cells, and (c)
file joint applications with Class AAA hospitals to use
Re-Join® to treat patients with their own haMPC
cells.
Our
competitors are pursuing treatments for osteoarthritis with knee
cartilage implants. However, unlike their approach, our
KOA therapy is not surgically invasive – it uses a small
amount (30ml) of adipose tissue obtained via liposuction from the
patient, which is cultured and re-injected into the patient. The
injections are designed to induce the body’s secretion of
growth factors promoting immune response and regulation, and
regrowth of cartilage. The down-regulation of the patient’s
immune response is aimed at reducing and controlling inflammation
which is a central cause of KOA.
We
believe our proprietary method, subsequent haMPC proliferation and
processing know-how will enable haMPC therapy to be a low cost and
relatively safe and effective treatment for KOA. Additionally,
banked haMPCs can continue to be stored for additional use in the
future.
AFP TCR-T
We
are evaluating the efficacy and specificity of the AFP TCR to
identity the most appropriate candidate for first time in human
(FTIH) study. In addition, human CD8+ T cells will be redirected
with the AFP TCRs and their anti-tumor activity will be evaluated
by in vitro cytokine release assay and cytotoxicity assay.
Concurrently, potential on/off-target toxicity including
allo-reactivity will be also evaluated and the best candidate TCRs
for clinical use will be further tested in humanized mouse models.
We plan to exercise our exclusive right to license the technology
from Augusta University if and when the FTIH proof of mechanism
study shows promising clinical efficacy signal and manageable
safety profile. Based on current estimates, we expect our
biopharmaceutical business to generate collaboration payment and
revenues through our sale of Kymriah products to Novartis and
primarily through the development of therapies for the treatment of
CD22 HCL and CD19 CAR-T for relapsing ALL, BCMA MM, NKG2D on AML,
and KOA within the next three to four years although we cannot
assure you that we will be successful at all or within the
foregoing timeframe.
NKG2D CAR
Early
studies on CAR-T therapy targeting NK cell signaling has shown
promising clinical benefits. We are developing novel generation
CARs using NKG2D extracellular fragment as antigen binding domain.
These CARs can recognize targets tumor cells expressing NKG2D
ligands. We plan to initiate first in human investigator
initiated trial with R/R AML patients in the next couple of
quarters.
TIL
CBMG
plans to develop tumor infiltrating lymphocytes (TIL) based
therapies in the near future. In the early stages of cancer, the
immune system tries to fight cancer by mobilizing lymphocytes to
attack the tumor. Lymphocytes has the capacity to recognize and
attack the tumor traffic to, and infiltrate into the tumor. These
cells are known as TIL. TIL based therapies have shown some
encouraging promises in early development. For example, in Phase-2
clinical studies in patients with metastatic melanoma performed by
Dr. Rosenberg at NCI, TIL therapy demonstrated robust efficacy in
patients with metastatic melanoma with objective response rates of
56% and complete response rates of 24%. We plan to start our
development with NSCLC, and eventually expand into other cancer
indications.
Competition
Many
companies operate in the cellular biopharmaceutical
field. Currently there are several approved stem cell
therapies on the market including Canada’s pediatric
graft-versus-host disease and the European Commission’s
approval in March 2018 for the treatment of complex perianal
fistulas in adult Crohn’s disease. There are several
public and private cellular biopharmaceutical focused companies
outside of China with varying phases of clinical trials addressing
a variety of diseases. We compete with these companies in
bringing cellular therapies to the market. However, our
focus is to develop a core business in the China market. This
difference in focus places us in a different competitive
environment from other western companies with respect to fund
raising, clinical trials, collaborative partnerships, and the
markets in which we compete.
The
PRC central government has a focused strategy to enable China to
compete effectively in certain designated areas of biotechnology
and the health sciences. Because of the aging population in
China, China’s Ministry of Science and Technology (MOST) has
targeted stem cell development as high priority field, and
development in this field has been intense in the agencies under
MOST. For example, the 973 Program has funded a number of
stem cell research projects such as differentiation of human
embryonic germ cells and the plasticity of adult stem cells.
To the best of our knowledge, none of the companies in China are
utilizing our proposed international manufacturing protocol and our
unique technologies in conducting what we believe will be fully
compliant CFDA-sanctioned clinical trials to commercialize cell
therapies in China. Our management believes that it is
difficult for most of these Chinese companies to turn their results
into translational stem cell science or commercially successful
therapeutic products using internationally acceptable
standards.
We
compete globally with respect to the discovery and development of
new cell-based therapies, and we also compete within China to bring
new therapies to market. In the biopharmaceutical
specialty segment, namely in the areas of cell processing and
manufacturing, clinical development of cellular therapies and cell
collection, processing and storage, are characterized by rapidly
evolving technology and intense competition. Our
competitors worldwide include pharmaceutical, biopharmaceutical and
biotechnology companies, as well as numerous academic and research
institutions and government agencies engaged in drug discovery
activities or funding, in the U.S., Europe and Asia. Many of these
companies are well-established and possess technical, research and
development, financial, and sales and marketing resources
significantly greater than ours. In addition, many of our smaller
potential competitors have formed strategic collaborations,
partnerships and other types of joint ventures with larger, well
established industry competitors that afford these companies
potential research and development and commercialization advantages
in the technology and therapeutic areas currently being pursued by
us. Academic institutions, governmental agencies and
other public and private research organizations are also conducting
and financing research activities which may produce products
directly competitive to those being commercialized by us. Moreover,
many of these competitors may be able to obtain patent protection,
obtain government (e.g. FDA) and other regulatory approvals and
begin commercial sales of their products before
us.
Our
primary competitors in the field of stem cell therapy for
osteoarthritis, and other indications include Cytori Therapeutics
Inc., Caladrius Biosciences, Inc. and others. Among our
competitors, to our knowledge, the only ones based in and operating
in Greater China are Lorem Vascular, which has partnered with
Cytori to commercialize Cytori Cell Therapy for the cardiovascular,
renal and diabetes markets in China and Hong Kong, and
OLife Bio, a Medi-Post joint venture with JingYuan Bio in Taian,
Shandong Province, who planned to initiate clinical trial in China
in 2016. To our knowledge, none of the aforementioned
companies have made any progress or advancement in the clinical
development in China.
Our
primary competitors in the field of cancer immune cell therapies
include pharmaceutical, biotechnology companies such as Novartis,
Juno Therapeutics, Inc. (Celgene), Kite Pharma, Inc. (Gilead),
CARSgen, Sorrento Therapeutics, Inc. and others. Among
our competitors, the ones based in and operating in Greater China
are CARsgen, Hrain Biotechnology, Nanjing Legend Biotechnology,
Galaxy Biomed, Persongen and Anke Biotechnology, Shanghai Minju
Biotechnology, Unicar Therapy, Immuno China Biotech, Chongqing
Precision Biotech, SiDanSai Biotechnology and China Oncology Focus
Limited, which has licensed Sorrento’s anti-PD-L1 monoclonal
antibody for Greater China. Other western big pharma and biotech
companies in the cancer immune cell therapies space have made
inroads in China by partnering with local companies. For example,
in April, 2016, Seattle-based Juno Therapeutics, Inc (Celgene)
started a new company with WuXi AppTec in China named JW
Biotechnology (Shanghai) Co., Ltd. by leveraging Juno's CAR-T and
TCR technologies together with WuXi AppTec's R&D and
manufacturing platform and local expertise to develop novel
cell-based immunotherapies for patients with hematologic and solid
organ cancers. In January 2017, Shanghai Fosun Pharmaceutical
created a joint venture with Santa Monica-based Kite Pharma Inc.
(Gilead) to develop, manufacture and commercialize CAR-T and TCR
products in China. In late 2017 Gilead acquired Kite Pharma for
$11.9 billion. On January 22, 2018 Celgene announced that it had
agreed to buy Juno Therapeutics for approximately $9
billion.
The
CFDA has received IND applications for CD19 chimeric antigen
receptor T cells cancer therapies from many companies and have
granted the initial phase of acceptance to three companies thus
far.
Additionally,
in the general area of cell-based therapies for knee osteoarthritis
ailments, we potentially compete with a variety of companies, from
big pharma to specialty medical products or biotechnology
companies. Some of these, such as Abbvie, Merck KGaA, Sanofi, Teva,
GlaxosmithKline, Baxter, Johnson & Johnson, Sanumed, Medtronic
and Miltenyi Biotech, are well-established and have substantial
technical and financial resources compared to
ours. However, as cell-based products are only just
emerging as viable medical therapies, many of our more direct
competitors are smaller biotechnology and specialty medical
products companies comprised of Vericel Corporation, Regeneus Ltd.,
Advanced Cell Technology, Inc., Nuo Therapeutics, Inc., Arteriocyte
Medical Systems, Inc., ISTO technologies, Inc., Ember Therapeutics,
Athersys, Inc., Bioheart, Inc., Cytori Therapeutics, Inc., Harvest
Technologies Corporation, Mesoblast, Pluristem, Inc., TissueGene,
Inc. Medipost Co. Ltd. and others. There are also several
non-cell-based, small molecule and peptide clinical trials
targeting knee osteoarthritis, and several other FDA approved
treatments for knee pain.
Certain
CBMG competitors also work with adipose-derived stem
cells. To the best of our knowledge, none of these
companies are currently utilizing the same technologies as ours to
treat KOA, nor to our knowledge are any of these companies
conducting government-approved clinical trials in
China.
Some
of our targeted disease applications may compete with drugs from
traditional pharmaceutical or Traditional Chinese Medicine
companies. We believe that our chosen targeted disease
applications are not effectively in competition with the products
and therapies offered by traditional pharmaceutical or Traditional
Chinese Medicine companies.
We
believe we have a strategic advantage over our competitors based on
our outstanding quality management system, robust and efficient
manufacturing capability which we believe is possessed by few to
none of our competitors in China, in an industry in which meeting
exacting standards and achieving extremely high purity levels is
crucial to success. In addition, in comparison to the
broader range of cellar biopharmaceutical firms, we believe we have
the advantages of cost and expediency, and a first mover advantage
with respect to commercialization of cell therapy products and
treatments in the China market.
Additional Information
Since
inception and through June 30, 2018, we have recorded accumulated
losses totaling approximately $129 million. Our historical
operating losses have resulted principally from our research and
development activities, including clinical trial activities for our
product candidates and general and administrative expenses.
Ultimately, if we secure additional approvals from the MOH, CFDA
and other regulatory bodies throughout the world for our product
candidates, our goal will be to augment our current sources of
revenue and, as applicable, deferred revenue (principally licensing
fees), with sales of such products or royalties from such sales, on
which we may pay royalties or other fees to our licensors and/or
third-party collaborators as applicable.
We have
based our estimates of development costs, market size estimates,
peak annual sales projections and similar matters described or
incorporated by reference in this prospectus on our market
research, third party reports and publicly available information
which we consider reliable. However, readers are advised that the
projected dates for filing and approval of our drug applications
with the MOH, CFDA or other regulatory authorities, our estimates
of development costs, our projected sales and similar metrics
regarding our KOA and CD therapies or any other product candidates
discussed elsewhere (or incorporated by reference) in this
prospectus are merely estimates and subject to many factors, many
of which may be beyond our control, which will likely cause us to
revise such estimates. Readers are also advised that our projected
sales figures do not take into account the royalties and other
payments we will need to make to our licensors and strategic
partners. Our estimates are based upon our management’s
reasonable judgments given the information available and their
previous experiences, although such estimates may not prove to be
accurate.
Corporate Information
Our
principal executive offices are located at 19925 Stevens Creek
Blvd., Suite 100 Cupertino, CA 95014. Our telephone number is:
(408) 973-7884.
The Offering
Common stock outstanding prior
to the offering
|
19,093,243
and 18,532,475 shares of common stock issued and outstanding as of
September 30, 2018, respectively.
|
Common stock offered by the selling stockholder
|
Up to
1,458,257 shares of common stock for sale by the selling
stockholder for its own account, which represent the shares issued
to Novartis in connection with the Purchase Agreement.
|
Proceeds
|
We will
not receive any proceeds from the sale of our common stock by the
selling stockholder.
|
Risk Factors
|
The
securities offered hereby involve a high degree of risk. See
“Risk Factors.”
|
NASDAQ Global Market Symbol
|
CBMG
|
The
number of shares of our common stock that will be outstanding
immediately prior this offering as shown above is based on
18,532,475 shares outstanding as of September 30, 2018. The number
of shares outstanding as of the date of this prospectus, as used
throughout this prospectus, unless otherwise indicated, excludes
the following, all as of September 30, 2018:
●
|
280,847
shares of our common stock issuable upon exercise of stock options
outstanding under our 2011 Incentive Stock Option Plan, which had a
weighted average exercise price of $6.14 per share;
|
●
|
588,750
shares of our common stock issuable upon exercise of stock options
outstanding under our 2013 Stock Incentive Plan, which had a
weighted average exercise price of $8.67 per share;
and
|
●
|
956,092
shares of our common stock issuable upon exercise of stock options
outstanding under our 2014 Stock Incentive Plan, which had a
weighted average exercise price of $16.26 per share, and 863,418
shares of our common stock outstanding under our 2014 Stock
Incentive Plan subject to vest before March 27, 2022.
|
RISK FACTORS
We have
included discussions of the risks, uncertainties and assumptions
under the heading “Risk Factors” included in our Annual
Report on Form 10-K for the year ended December 31, 2017 and in our
Quarterly Report on Form 10-Q for the period ended June 30, 2018,
which risk factors are incorporated by reference into this
prospectus. See “Where You Can Find More Information”
for an explanation of how to get a copy of this prospectus.
Additional risks related to our securities may also be described in
a prospectus supplement and in any related free writing prospectus
that we may authorize to be provided to you.
Investing in our securities involves a high
degree of risk. Before deciding whether to invest in our
securities, you should carefully consider the risk factors we
describe in any prospectus supplement and in any related free
writing prospectus that we may authorize to be provided to you or
in any report incorporated by reference into this prospectus or
such prospectus supplement, including our Annual Report on Form
10-K for the year ended December 31, 2017, or any Annual Report on
Form 10-K or Quarterly Report on Form 10-Q that is incorporated by
reference into this prospectus or such prospectus supplement after
the date of this prospectus. Although we discuss key risks in those
risk factor descriptions, additional risks not currently known to
us or that we currently deem immaterial also may impair our
business. Our subsequent filings with the SEC may contain amended
and updated discussions of significant risks. We cannot predict
future risks or estimate the extent to which they may affect our
financial performance.
Please
also read carefully the section above entitled “Cautionary
Note Regarding Forward-Looking Statements.”
USE OF PROCEEDS
We will
not receive any proceeds from the sale of shares registered
hereunder by the selling stockholder.
DETERMINATION OF OFFERING PRICE
The
selling stockholder will offer common stock at the prevailing
market prices, fixed prices or privately negotiated price as it may
determine from time to time.
The
offering price of our common stock to be sold by the selling
stockholder does not necessarily bear any relationship to our book
value, assets, past operating results, financial condition or any
other established criteria of value.
In
addition, there is no assurance that our common stock will trade at
market prices in excess of the offering price as prices for common
stock in any public market will be determined in the marketplace
and may be influenced by many factors, including the depth and
liquidity.
SELLING STOCKHOLDER
The
following table sets forth certain information as of September 30,
2018 regarding the selling stockholder and the shares offered by it
in this prospectus. In computing the number of shares owned by a
person and the percentage ownership of that person in the table
below, securities that are currently convertible or exercisable
into shares of our common stock that are being offered in this
prospectus are deemed outstanding. Such shares, however, are not
deemed outstanding for the purposes of computing the percentage
ownership of any other person. Except as indicated in the footnotes
to the following table, each stockholder named in the table has
sole voting and investment power with respect to the shares set
forth opposite the selling stockholder’s name.
On
September 25, 2018, the selling stockholder entered into a License
and Collaboration Agreement with us together with certain of our
subsidiaries and controlled entities pursuant to which we will
manufacture and supply the selling stockholder the Chimeric Antigen
Receptor T cell therapy Kymriah® (tisagenlecleucel) (the
“Product”). We also granted the selling stockholder a
world-wide license to certain of our intellectual property and
technology, including intellectual property and technology related
to the Product. Otherwise, the selling stockholder does not have
any material relationship of any kind with us or any of our
affiliates. The selling stockholder has not held a position as an
officer or director of the Company, nor does the selling
stockholder have any family relationships with our directors,
officers or controlling shareholders with us or any of our
affiliates. Furthermore, the selling stockholder is not a
registered broker-dealer or an affiliate of a registered
broker-dealer.
All
information with respect to share ownership has been furnished by
the selling stockholder. The common stock being offered is being
registered to permit secondary trading of the shares and the
selling stockholder may offer all or part of the common stock owned
for resale from time to time.
The
term “selling stockholder” also includes any
transferees, pledges, donees, or other successors in interest to
the selling stockholder named in the table below. To our knowledge,
subject to applicable community property laws, each person named in
the table has sole voting and investment power with respect to the
common stock set forth opposite such person’s name. We will
file a supplement to this prospectus (or a post-effective amendment
hereto, if necessary) to name successors to any named selling
stockholder who is able to use this prospectus to resell the
securities registered hereby.
Name
|
Total number of
shares of common stock owned prior to the offering
|
Maximum number
of shares to be offered pursuant to this prospectus
|
Number of shares
owned after this offering
|
Percentage to be
beneficially owned after this offering
|
|
|
|
|
|
Novartis Pharma
AG
|
1,458,257
|
1,458,257
|
0
|
0
|
PLAN OF DISTRIBUTION
Selling Stockholder
We are
registering the shares of common stock on behalf of the selling
stockholder. The selling stockholder and any of its pledgees,
assignees and successors-in-interest may, from time to time, on a
continuous or delayed basis, sell any or all of their common stock
covered hereby directly to one or more purchasers or through
brokers, dealers, or underwriters who may act solely as agents at
market prices prevailing at the time of sale, at prices related to
the prevailing market prices, at negotiated prices, or at fixed
prices, which may be changed on any stock exchange, market or
trading facility on which the shares are traded or in private
transactions. The sale of the selling stockholder’s common
stock offered by this prospectus may be effected in one or more of
the following methods:
●
ordinary brokerage transactions and transactions in which the
broker-dealer solicits purchasers;
●
transactions involving cross or block trades;
●
purchases by a broker-dealer as principal and resale by the
broker-dealer for its account;
●
exchange distributions in accordance with the rules of the
applicable exchange;
●
privately negotiated transactions;
●
short sales after the registration statement of which this
prospectus forms a part becomes effective;
●
transactions through broker-dealers that agree with the selling
stockholder to sell a specified number of such shares at a
stipulated price per share;
●
through the writing or settlement of options or other hedging
transactions, whether through an options exchange or
otherwise;
●
“at the market” into an existing market for the common
stock;
●
through the writing of options on the shares;
●
a combination of any such methods of sale; and
●
any other method permitted pursuant to applicable law.
In
order to comply with the securities laws of certain states, if
applicable, the shares of the selling stockholder may be sold only
through registered or licensed brokers or dealers. In addition, in
certain states, such shares may not be sold unless they have been
registered or qualified for sale in the state or an exemption from
the registration or qualification requirement is available and
complied with.
The
selling stockholder may also sell shares of common stock under Rule
144 promulgated under the Securities Act (“Rule 144”),
if available, rather than under this prospectus. In addition, the
selling stockholder may transfer the shares of common stock by
other means not described in this prospectus.
The
selling stockholder may also sell the shares directly to market
makers acting as principals and/or broker-dealers acting as agents
for themselves or their customers. Such broker-dealers may receive
compensation in the form of discounts, concessions or commissions
from the selling stockholder and/or the purchasers of shares for
whom such broker-dealers may act as agents or to whom they sell as
principal or both, which compensation as to a particular
broker-dealer might be in excess of customary commissions. Market
makers and block purchasers purchasing the shares will do so for
their own account and at their own risk. It is possible that the
selling stockholder will attempt to sell shares of common stock in
block transactions to market makers or other purchasers at a price
per share which may be below the then market price. The selling
stockholder cannot assure that all or any of the shares offered in
this prospectus will be issued to, or sold by, such selling
stockholder.
Brokers, dealers,
underwriters, or agents participating in the distribution of the
shares held by the selling stockholder as agents may receive
compensation in the form of commissions, discounts, or concessions
from the selling stockholder and/or purchasers of the common stock
for whom the broker-dealers may act as agent. The selling
stockholder may agree to indemnify any agent, dealer or
broker-dealer that participates in transactions involving sales of
the shares if liabilities are imposed on that person under the
Securities Act.
The
selling stockholder has advised us that it has not entered into any
agreements, understandings or arrangements with any underwriters or
broker-dealers regarding the sale of their shares of common stock,
nor is there an underwriter or coordinating broker acting in
connection with a proposed sale of shares of common stock by the
selling stockholder. If we are notified by the selling stockholder
that any material arrangement has been entered into with a
broker-dealer for the sale of shares of common stock, if required,
we will file a supplement to this prospectus.
In
connection with the sale of the securities or interests therein,
the selling stockholder may enter into hedging transactions with
broker-dealers or other financial institutions, which may in turn
engage in short sales of the securities in the course of hedging
the positions they assume. The selling stockholder may also sell
securities short and deliver these securities to close out their
short positions, or loan or pledge the securities to broker-dealers
that in turn may sell these securities. The selling stockholder may
also enter into option or other transactions with broker-dealers or
other financial institutions or create one or more derivative
securities which require the delivery to such broker-dealer or
other financial institution of securities offered by this
prospectus, which securities such broker-dealer or other financial
institution may resell pursuant to this prospectus (as supplemented
or amended to reflect such transaction).
With
regard only to the shares it sells for its own behalf, the selling
stockholder may be deemed an “underwriter” within the
meaning of the Securities Act. This offering as it relates to the
selling stockholder will terminate on the date that all shares
issued to and issuable to the selling stockholder that are offered
by this prospectus have been sold by the selling
stockholder.
We may
suspend the sale of shares by the selling stockholder pursuant to
this prospectus for certain periods of time for certain reasons,
including if the prospectus is required to be supplemented or
amended to include additional material information.
If the
selling stockholder uses this prospectus for any sale of the shares
of common stock, the selling stockholder will be subject to the
prospectus delivery requirements of the Securities
Act.
We are
required to pay the expenses in connection with the registration of
the shares being registered hereunder. We have agreed to indemnify
the selling stockholders against certain losses, claims, damages
and liabilities, including liabilities under the Securities
Act.
We
agreed to keep this prospectus effective until the date that (i)
the securities constitute 4.9% or less of the outstanding shares of
common stock of the Company and may be resold by the selling
stockholder without registration and without regard to any volume
or manner-of-sale limitations by reason of Rule 144, without the
requirement for the Company to be in compliance with the current
public information under Rule 144 or any other rule of similar
effect or (ii) all of the securities have been sold pursuant to
this prospectus or Rule 144 or any other rule of similar
effect.
Regulation M
The
anti-manipulation rules of Regulation M under the Exchange Act may
apply to sales of our common stock and activities of the selling
stockholder.
We have
advised the selling stockholder that while it is engaged in a
distribution of the shares included in this prospectus it is
required to comply with Regulation M promulgated under the Exchange
Act. With certain exceptions, Regulation M precludes the selling
stockholder, any affiliated purchasers, and any broker-dealer or
other person who participates in the distribution from bidding for
or purchasing, or attempting to induce any person to bid for or
purchase any security which is the subject of the distribution
until the entire distribution is complete. Regulation M also
prohibits any bids or purchases made in order to stabilize the
price of a security in connection with the distribution of that
security. All of the foregoing may affect the marketability of the
shares offered hereby this prospectus.
DESCRIPTION
OF SECURITIES TO BE REGISTERED
General
Our
authorized capital stock consists of 300,000,000 shares of common
stock and 50,000,000 shares of preferred stock. As of the date of
this prospectus, our outstanding capital stock consists of
18,532,475 shares of common stock, $0.001 par value, and no shares
of preferred stock. These figures do not include securities that
may be issued: (i) pursuant to our Amended and Restated 2011
Incentive Plan; (ii) pursuant to our 2013 Stock Incentive Plan; or
(iii) pursuant to our 2014 Stock Incentive Plan, as
amended.
We are
a Delaware corporation and our affairs are governed by our
Certificate of Incorporation and By-laws. The following are
summaries of material provisions of our Certificate of
Incorporation and By-laws insofar as they relate to the material
terms of our common shares. Complete copies of our Certificate of
Incorporation and By-laws are filed as exhibits to our public
filings.
Common Stock
Our
common stock is listed on the Nasdaq Global Market under the symbol
“CBMG.”
All
outstanding shares of common stock are of the same class and have
equal rights and attributes. The holders of common stock are
entitled to one vote per share on all matters submitted to a vote
of stockholders of the Company. All stockholders are entitled to
share equally in dividends, if any, as may be declared from time to
time by the Board of Directors out of funds legally available. In
the event of liquidation, the holders of common stock are entitled
to share ratably in all assets remaining after payment of all
liabilities. The stockholders do not have cumulative or preemptive
rights.
Dividend Rights
Holders
of the common stock may receive dividends when, as and if declared
by our Board of Directors out of the assets legally available for
that purpose and subject to the preferential dividend rights of any
other classes or series of stock of our Company. We have never
paid, and have no plans to pay, any dividends on our shares of
common stock.
Voting Rights
Holders
of the common stock are entitled to one vote per share in all
matters as to which holders of common stock are entitled to vote.
Holders of not less than a majority of the outstanding shares of
common stock entitled to vote at any meeting of stockholders
constitute a quorum unless otherwise required by law.
Election of Directors
Our Board of Directors is divided into three classes,
each of which will generally serve for a term of three years with
only one class of directors being elected in each
year. The common stock has no cumulative voting rights,
including with respect to the election of directors.
Liquidation
In the
event of any liquidation, dissolution or winding up of the Company,
holders of the common stock have the right to receive ratably and
equally all of the assets remaining after payment of liabilities
and liquidation preferences of any preferred stock then
outstanding.
Redemption
The
common stock is not redeemable or convertible and does not have any
sinking fund provisions.
Preemptive Rights
Holders
of the common stock do not have preemptive rights.
Other Rights
Our
common stock is not liable to calls or to assessment or for
liabilities imposed on our stockholders under state
statutes.
Our
board is divided into three classes, each of which will generally
serve for a term of three years with only one class of directors
being elected in each year. The common stock has no cumulative
voting rights, including with respect to the election of
directors.
INTERESTS OF NAMED EXPERTS AND COUNSEL
None.
LEGAL MATTERS
The
validity of the securities offered by this prospectus, and any
supplement thereto, will be passed upon for us by Ellenoff Grossman
& Schole LLP, New York, NY.
EXPERTS
The
financial statements for the years ended December 31, 2017, 2016
and 2015 incorporated in this prospectus by reference to the Annual
Report on Form 10-K for the year ended December 31, 2017 have been
so incorporated in reliance on the report of BDO China Shu Lun Pan
Certified Public Accountants LLP, an independent registered public
accounting firm, given on the authority of such firm as an expert
in auditing and accounting.
WHERE YOU CAN FIND MORE INFORMATION
We have
filed a registration statement with the Securities and Exchange
Commission under the Securities Act with respect to the shares of
our common stock offered by this prospectus. This prospectus is
part of that registration statement and does not contain all the
information included in the registration statement.
For
further information with respect to our common stock and us, you
should refer to the registration statement, its exhibits and the
material incorporated by reference therein. Portions of the
exhibits have been omitted as permitted by the rules and
regulations of the Securities and Exchange Commission. Statements
made in this prospectus as to the contents of any contract,
agreement or other document referred to are not necessarily
complete. In each instance, we refer you to the copy of the
contracts or other documents filed as an exhibit to the
registration statement, and these statements are hereby qualified
in their entirety by reference to the contract or document. The
registration statement may be inspected and copied at the public
reference facilities maintained by the Securities and Exchange
Commission at Room 1024, 100 F Street, N.E., Washington, D.C.
20549. Copies of those filings can be obtained from the
Commission’s Public Reference Room, 100 F Street, N.E.,
Washington, D.C. 20549 at prescribed rates and may also be obtained
from the web site that the Securities and Exchange Commission
maintains at http://www.sec.gov. You may also call the Commission
at 1-800-SEC-0330 for more information. We file annual, quarterly
and current reports and other information with the Securities and
Exchange Commission. You may read and copy any reports, statements
or other information on file at the Commission’s public
reference room in Washington, D.C. You can request copies of those
documents upon payment of a duplicating fee, by writing to the
Securities and Exchange Commission.
INCORPORATION OF CERTAIN INFORMATION BY REFERENCE
We are
“incorporating by reference” certain documents we file
with the SEC, which means that we can disclose important
information to you by referring you to those documents. The
information in the documents incorporated by reference is
considered to be part of this prospectus. Statements contained in
documents that we file with the SEC and that are incorporated by
reference in this prospectus will automatically update and
supersede information contained in this prospectus supplement,
including information in previously filed documents or reports that
have been incorporated by reference in this prospectus, to the
extent the new information differs from or is inconsistent with the
old information. We have filed or may file the following documents
with the SEC and they are incorporated herein by reference as of
their respective dates of filing:
●
|
our
Annual Report on Form 10-K for the year ended December 31, 2017 as
filed with the SEC on March 5, 2018;
|
●
|
our
Quarterly Reports on Form 10-Q for the quarterly period ended March
31, 2018 as filed with the SEC on May 7, 2018 and for the quarterly
period ended June 30, 2018 as filed with the SEC on August 7,
2018;
|
●
|
our
Current Reports on Form 8-K and/or their amendments as filed with
the SEC on January 31, 2018, February 7, 2018, February 12, 2018,
February 15, 2018, April 19, 2018, April 23, 2018, April 30, 2018,
September 27, 2018, October 9, 2018 and October 10,
2018;
|
●
|
the
information specifically incorporated by reference into our Annual
Report on Form 10-K for the year ended December 31, 2017 from our
definitive proxy statement on Schedule 14A related to our 2018
annual meeting of stockholders, which was filed with the SEC on
March 12, 2018;
|
●
|
the
description of our Common Stock contained in our Form 8-A filed
with the SEC on June 13, 2014, and as it may be further amended
from time to time, under the caption “Item 1. Description of
Registrant’s Securities to be Registered.”
|
All
reports and definitive proxy or information statements filed
pursuant to Section 13(a), 13(c), 14 or 15(d) of the Exchange Act
subsequent to the filing of this Registration Statement and prior
to the filing of a post-effective amendment which indicates that
all securities offered hereby have been sold or which de-registers
all securities then remaining unsold shall be deemed to be
incorporated by reference into this Registration Statement and to
be a part hereof from the date of filing such documents, except as
to specific sections of such statements as set forth therein. Any
statement contained in a document incorporated or deemed to be
incorporated by reference herein shall be deemed to be modified or
superseded for purposes of this Registration Statement to the
extent that a statement contained in any subsequently filed
document which also is deemed to be incorporated by reference
herein modifies or supersedes such statement.
You may
request a copy of these filings at no cost (other than exhibits
unless such exhibits are specifically incorporated by reference) by
writing or telephoning us at the following address and telephone
number:
Cellular
Biomedicine Group, Inc.
19925
Stevens Creek Blvd., Suite 100
Cupertino,
CA 95014
Telephone:
(408) 973-7884
Attention:
Tony Liu
DISCLOSURE OF COMMISSION POSITION ON
INDEMNIFICATION FOR SECURITIES LAW VIOLATIONS
Our
directors and officers are indemnified to the fullest extent
permitted under Delaware law. We may also purchase and maintain
insurance which protects our officers and directors against any
liabilities incurred in connection with their service in such a
capacity, and such a policy may be obtained by us in the
future.
Insofar
as indemnification for liabilities arising under the Securities Act
may be permitted to our directors, officers and controlling persons
pursuant to the foregoing, or otherwise, we have been advised that
in the opinion of the SEC such indemnification is against public
policy as expressed in the Securities Act and is, therefore,
unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by us of expenses
incurred or paid by a director, officer or controlling person of
ours in the successful defense of any action, suit or proceeding)
is asserted by such director, officer or controlling person in
connection with the securities being registered, we will, unless in
the opinion of our counsel the matter has been settled by
controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is
against public policy as expressed in the Securities Act and will
be governed by the final adjudication of such issue.
You should rely only on the information contained in this document.
We have not authorized anyone to provide you with information that
is different. This document may only be used where it is legal to
sell these securities. The information in this document may only be
accurate on the date of this document.
Additional risks and uncertainties not presently known or that are
currently deemed immaterial may also impair our business
operations. The risks and uncertainties described in this document
and other risks and uncertainties which we may face in the future
will have a greater impact on those who purchase our common stock.
These purchasers will purchase our common stock at the market price
or at a privately negotiated price and will run the risk of losing
their entire investment.
Up to 1,458,257 Shares of
Common Stock
Prospectus
, 2018
You should rely only on the information contained in this
prospectus. We have not authorized anyone to provide you with
information different from that contained in this prospectus or any
prospectus supplement. This prospectus is not an offer of these
securities in any jurisdiction where an offer and sale is not
permitted. The information contained in this prospectus is accurate
only as of the date of this prospectus, regardless of the time of
delivery of this prospectus or any sale of our common
stock.
PART II
INFORMATION NOT REQUIRED IN THE PROSPECTUS
Item 14. Other Expenses of Issuance and Distribution
The
following table sets forth an estimate of the fees and expenses,
other than the underwriting discounts and commissions, payable by
the Registrant in connection with the issuance and distribution of
the securities being registered. All the amounts shown are
estimates, except for the SEC registration fee.
SEC Registration
Fee
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$3,088
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Accounting Fees and
Expenses
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$29,073
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Legal Fees and
Expenses
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$25,000
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Total
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$57,161
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(1) These fees are
calculated based on the securities offered and the number of
issuance and accordingly cannot be estimated at this
time.
Item 15. Indemnification of Directors and Officers
Our
certificate of incorporation provides that all our directors,
officers, employees and agents shall be entitled to be indemnified
by us to the fullest extent permitted under the Delaware General
Corporation Law, provided that they acted in good faith and that
they reasoned their conduct or action was in, or not opposed to,
the best interest of our company.
Our
bylaws provide for indemnification of our officers, directors and
others who become a party to an action on our behalf by us to the
fullest extent not prohibited under the Delaware General
Corporation Law. Further, we maintain officer and director
liability insurance.
The
underwriting agreement(s) that we may enter into in connection with
the securities being offered under this registration statement may
provide for indemnification by any underwriters used by us, our
directors, our officers who sign the registration statement and our
controlling persons for some liabilities, including liabilities
arising under the Securities Act.
Insofar
as indemnification for liabilities arising under the Securities Act
may be permitted to directors, officers and controlling persons of
the Company pursuant to the foregoing provisions, or otherwise, we
have been advised that in the opinion of the Securities and
Exchange Commission such indemnification is against public policy
as expressed in the Securities Act and is, therefore,
unenforceable.
Item 16. Exhibits
The
following exhibits are filed with this registration
statement.
ITEM 15. EXHIBITS AND
FINANCIAL STATEMENT SCHEDULES.
Exhibit
Number
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Description
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2.1
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Plan of
reorganization and exchange agreement (1)
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2.2
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Agreement
and Plan of Merger, dated November 13, 2012 (2)
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2.3
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Amendment
No. 1 to Agreement and Plan of Merger, dated January 15, 2013
(3)
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2.4
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Amendment
No. 2 to Agreement and Plan of Merger, dated January 31, 2013
(4)
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2.5
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Amendment
No. 3 to Agreement and Plan of Merger, dated February 5, 2013
(5)
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4.1
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Form of
lock-up agreement (1)
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4.2
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2011
Incentive Stock Option Plan (6)
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4.3
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Amended
and Restated 2011 Incentive Stock Option Plan (7)
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4.4
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2013
Stock Incentive Plan (8)
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4.5
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2014
Stock Incentive Plan (9)
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4.6
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Amendment
No. 1 to 2014 Stock Incentive Plan (10)
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4.7
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Registration
Rights Agreement, dated January 30, 2018, by and among the Company,
Wealth Map Holdings Limited, Earls Mill Limited, and Bosun S. Hau
(11)
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4.8
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Amendment
No. 1 to Registration Rights Agreement, dated February 5, 2018, by
and among the Company, Wealth Map Holdings Limited, Earls Mill
Limited, Bosun S. Hau and Rui Zhang (12)
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4.9
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Registration
Rights Agreement, dated September 26, 2018, by and between the
Company and Novartis Pharma AG. (13)
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5.1
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Opinion
of Ellenoff Grossman & Schole LLP *
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23.1
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Consent
of BDO China Shu Lun Pan Certified Public Accountants LLP
*
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23.2
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Consent
of Ellenoff Grossman & Schole LLP (Included in Exhibit
5.1)
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24.1
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Power
of Attorney *
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*Filed
herewith.
1.
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Incorporated
by reference filed with the Registration Statement on Form 10-SB
filed with the Securities and Exchange Commission on October 30,
2006 (File No. 000-52282)
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2.
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Incorporated
by reference filed with the Form 8-K filed with the Securities and
Exchange Commission on November 20, 2012 (File No.
000-52282)
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3.
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Incorporated
by reference filed with the Form 8-K filed with the Securities and
Exchange Commission on January 22, 2013 (File No.
000-52282)
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4
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Incorporated
by reference filed with the Form 8-K filed with the Securities and
Exchange Commission on February 4, 2013 (File No.
000-52282)
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5.
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Incorporated
by reference filed with the Form 8-K filed with the Securities and
Exchange Commission on February 12, 2013 (File No.
000-52282)
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6.
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Incorporated
by reference filed with the Registration Statement on Form S-8
filed with the Securities and Exchange Commission on March 7, 2012
(File No. 333-179974)
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7.
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Incorporated
by reference filed with the Form 10-K filed with the Securities and
Exchange Commission on April 4, 2013 (File No.
000-52282)
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8.
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Incorporated
by reference filed with Schedule 14A filed with the Securities and
Exchange Commission on November 21, 2013 (File No.
000-52282)
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9.
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Incorporated
by reference filed with Schedule 14A filed with the Securities and
Exchange Commission on September 23, 2014 (File No.
001-36498)
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10.
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Incorporated
by reference filed with Schedule 14A/A filed with the Securities
and Exchange Commission on March 23, 2017 (File No.
001-36498)
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11.
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Incorporated
by reference filed with the Form 8-K filed with the Securities and
Exchange Commission on January 31, 2018 (File No.
000-36498).
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12.
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Incorporated
by reference filed with the Form 8-K filed with the Securities and
Exchange Commission on February 7, 2018 (File No.
000-36498).
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13.
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Incorporated
by reference filed with the Form 8-K filed with the Securities and
Exchange Commission on September 27, 2018 (File No.
001-36498)
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Item 17. Undertakings
(a) The
undersigned registrant hereby undertakes:
(1) To
file, during any period in which offers or sales are being made, a
post-effective amendment to this registration
statement:
(i) To
include any prospectus required by Section 10(a)(3) of the
Securities Act of 1933;
(ii) To
reflect in the prospectus any facts or events arising after the
effective date of the registration statement (or the most recent
post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set
forth in the registration statement. Notwithstanding the foregoing,
any increase or decrease in volume of securities offered (if the
total dollar value of securities offered would not exceed that
which was registered) and any deviation from the low or high end of
the estimated maximum offering range may be reflected in the form
of prospectus filed with the Commission pursuant to Rule 424(b) if,
in the aggregate, the changes in volume and price represent no more
than 20 percent change in the maximum aggregate offering price set
forth in the “Calculation of Registration Fee” table in
the effective registration statement;
(iii)
To include any material information with respect to the plan of
distribution not previously disclosed in the registration statement
or any material change to such information in the registration
statement.
Provided, however, that the
undertakings set forth in paragraphs (a)(1)(i), (a)(1)(ii) and
(a)(1)(iii) above do not apply if the registration statement is on
Form S-3 or Form F-3 and the information required to be included in
a post-effective amendment by those paragraphs is contained in
reports filed with or furnished to the Commission by the registrant
pursuant to Section 13 or Section 15(d) of the Securities Exchange
Act that are incorporated by reference in the registration
statements or is contained in a form of prospectus filed pursuant
to Rule 424(b) that is a part of the registration
statement.
(2)
That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall
deemed to be a new registration statement relating to the
securities offered therein, and the offering of such securities at
that time shall be deemed to be the initial bona fide offering
thereof.
(3) To
remove from registration by means of a post-effective amendment any
of the securities being registered which remain unsold at the
termination of the offering.
(5)
That, for the purpose of determining liability under the Securities
Act of 1933 to any purchaser:
(1) (i)
Each prospectus filed by the registrant pursuant to Rule 424(b)(3)
shall be deemed to be part of the registration statement as of the
date the filed prospectus was deemed part of and included in the
registration statement; and
(B)
Each prospectus required to be filed pursuant to Rule 424(b)(2),
(b)(5), or (b)(7) as part of a registration statement in reliance
on Rule 430B relating to an offering made pursuant to Rule
415(a)(1)(i), (vii), or (x) for the purpose of providing the
information required by section 10(a) of the Securities Act of 1933
shall be deemed to be part of and included in the registration
statement as of the earlier of the date such form of prospectus is
first used after effectiveness or the date of the first contract of
sale of securities in the offering described in the prospectus. As
provided in Rule 430B, for liability purposes of the issuer and any
person that is at that date an underwriter, such date shall be
deemed to be a new effective date of the registration statement
relating to the securities in the registration statement to which
that prospectus relates, and the offering of such securities at
that time shall be deemed to be the initial bona fide offering
thereof. Provided, however, that no statement made in a
registration statement or prospectus that is part of the
registration statement or made in a document incorporated or deemed
incorporated by reference into the registration statement or
prospectus that is part of the registration statement will, as to a
purchaser with a time of contract of sale prior to such effective
date, supersede or modify any statement that was made in the
registration statement or prospectus that was part of the
registration statement or made in any such document immediately
prior to such effective date.
(ii) If
the registrant is subject to Rule 430C, each prospectus filed
pursuant to Rule 424(b) as part of a registration statement
relating to an offering, other than registration statements relying
on Rule 430B or other than prospectuses filed in reliance on Rule
430A ( § 230.430A of this chapter), shall be deemed to be part
of and included in the registration statement as of the date it is
first used after effectiveness. Provided, however, that no
statement made in a registration statement or prospectus that is
part of the registration statement or made in a document
incorporated or deemed incorporated by reference into the
registration statement or prospectus that is part of the
registration statement will, as to a purchaser with a time of
contract of sale prior to such first use, supersede or modify any
statement that was made in the registration statement or prospectus
that was part of the registration statement or made in any such
document immediately prior to such date of first use.
(b) The
undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, as
amended, each filing of the registrant’s annual report
pursuant to Section 13(a) or Section 15(d) of the Securities
Exchange Act that is incorporated by reference in this registration
statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of
such securities at that time shall be deemed to be the initial bona
fide offering thereof.
(h)
Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers and
controlling persons of the registrant pursuant to the foregoing
provisions or otherwise, the registrant has been advised that in
the opinion of the Securities and Exchange Commission such
indemnification is against public policy as expressed in the
Securities Act of 1933 and is therefore unenforceable. In the event
that a claim for indemnification against such liabilities (other
than the payment by the registrant of expenses incurred or paid by
a director, officer or controlling person of the registrant in the
successful defense of any action, suit or proceeding) is asserted
by such director, officer or controlling person in connection with
the securities being registered, the registrant will, unless in the
opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the
question whether such indemnification by it is against public
policy as expressed in the Securities Act of 1933, and will be
governed by the final adjudication of such issue.
SIGNATURES
Pursuant to the
requirements of the Securities Act of 1933, as amended, the
registrant certifies that it has reasonable grounds to believe that
it meets all of the requirements for filing on Form S-3 and has
duly caused this registration statement to be signed on its behalf
by the undersigned, thereunto duly authorized, in the City of
Cupertino, California, on October 10, 2018.
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CELLULAR BIOMEDICINE GROUP, INC.
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By:
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/s/
Bizuo (Tony) Liu
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Name:
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Bizuo
(Tony) Liu
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Title:
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Chief
Executive Officer
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KNOW
ALL MEN BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints Bizuo (Tony) Liu their true and
lawful attorney-in-fact, with full power of substitution and
resubstitution for them and in their name, place and stead, in any
and all capacities to sign any and all amendments including
post-effective amendments to this registration statement, and to
file the same, with all exhibits thereto, and other documents in
connection therewith, with the SEC, hereby ratifying and confirming
all that said attorney-in-fact or their substitute, each acting
alone, may lawfully do or cause to be done by virtue
thereof.
Pursuant to the
requirements of the Securities Act of 1933, as amended, this
Registration Statement has been signed by the following persons on
behalf of the Registrant in the capacities and on the dates
indicated.
Signature
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Title
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Date
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/s/
Terry Belmont
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Chairman
of the Board
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October
10, 2018
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Terry
Belmont
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/s/
Bizuo (Tony) Liu
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Chief
Executive Officer, Chief Financial Officer, Director
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October
10, 2018
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Bizuo
(Tony) Liu
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(Principal
Executive, Financial, and Accounting Officer)
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/s/
Alan Au
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Director
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October
10, 2018
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Alan
Au
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/s/
Hansheng Zhou
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Director
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October
10, 2018
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Hansheng
Zhou
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/s/ Gang
Ji
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Director
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October 10,
2018
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Gang
Ji
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/s/Wen Tao
(Steve) Liu
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Director
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October 10,
2018
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Wen Tao (Steve)
Liu
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/s/
Nadir Patel
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Director
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October
10, 2018
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Nadir
Patel
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/s/
Bosun Hau
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Director
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October
10, 2018
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Bosun
Hau
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