Exclusive: CBMG CEO Talks Stem-Cell Therapies, Cancer Treatments, Financials & The Chinese Market – Benzinga

Cellular Biomedicine Group Inc (NASDAQ: CBMG) is a micro-cap biomedicine company focused on the development of treatments for cancerous and degenerative diseases through cell-based technologies.

Last week, Benzinga attended SCN Corporate Connects Family Office & Life Science Symposium at the NASDAQ and had the chance to talk with CBMG CEO Tony Liu who walked us through some of the companys products, management team, market potential, how they use stem cells and more.

CBMG has two leading technology platforms at the time, Liu began. One is an immune cell therapy aimed at the treatment of a broad range of cancers using Cancer Vaccines, Chimeric Antigen Receptor T cell (CAR-T) and anti-PD-1 Technologies. The other one uses stem cells for regenerative purposes; the key indication for this therapy is knee osteoarthritis.

Our focus is on these technologies and our market is China, because that is the largest -by far- in population for the indication, he pointed out.

Benzinga: How does the company use stem cells.

Liu: In simple terms, a stem cell is basically regenerative. So a stem cell has the enormous power of expanding, continue from the embryonic stem cell to the baby stem cell and ultimately to the adult stem cell, so it has a great ability to continue to expand and grow.

From the medical perspective, an adult stem cell can regenerate, it can repair [tissue]. So, in our lead product, we use fat tissue from the stomach and we all have a few ounces of extra fat. We take the stem cell out from the fat tissue culture, expand it, and then we inject back in the kneecap for patients with a knee osteoarthritis problem.

Benzinga: Are there any other indications you will be targeting in the near-future?

Liu: Were targeting lymphoma, leukemia, solid tumors and many other areas.

Benzinga moved on to ask about the size of the market.

Liu: Every year we look at 4.5 million to 5 million new cancer patients. That is, every minute we are talking about eight or nine new cancer patients. That is why it is a huge social issue. That is one of the reasons why I choose to stay in the business after I spent 19 years with Microsoft Corporation (NASDAQ: MSFT) and four years with Alibaba Group Holding Ltd (NYSE: BABA). I think this area socially, you want to make impactful, and economically I think there is a huge business from that side.

Because our focus is on the Chinese market there are many investors in the U.S. who do not know us well. However, I believe investors should look at the company: we have a huge market, great scientists, manufacturing space

Then, for our stem cell therapies in China, 57 million people have a knee issue; in the U.S., 27 million [people] have a knee issue. Stem cells can help knees regenerate by doing two things. First, by helping with the pain, providing symptom relief and functional improvements. Secondly, they regenerate the cartilage, which originally caused the knee problem. Nowadays, patients can only opt between pain pills or a knee replacement.

Today, if you do a knee replacement, you are looking at tens of thousands [of dollars]. So, any way you look at it, [its a] multi-billion [market] for knee treatments.

Benzinga: When you say stem cells, people imagine It is a slightly controversial subject; it has some political implications. So, what is the Chinese governments stance regarding stem cells? Are there any risks? Is it accepted? What is the view of stem cells in China?

Liu: Chinas government has been extremely supportive of using stem cells. I think the controversy comes in where people use embryonic stem cells, when you create a new life, that is where the controversy is. But, we use what we call adult stem cells to improve peoples lives, improve their life experiences

On adult stem cells, there is little controversy. The policy of Chinas government is very clear. In fact, in the U.S. it is very clear as well. CBMG has been graced to work with the California Stem Cell Institute. Potentially, we are going to ask the U.S. for large-scale clinical trials.

Our management team was educated in the U.S., and has experience managing large businesses, Liu commented. Our Chief Scientific Officer is a former MedImmune/AstraZeneca plc (ADR) (NYSE: AZN) director. Some of our oncology scientists are from there as well. We also have scientists from the National Cancer Institute. We also have a person who is leading our manufacturing capabilities who worked for Harvard for 30 years and a top German company, leading research for seven years total.

So, we have this kind of people with skills come to China. Our company has 130 people with PhDs, and more than 30 with post-doctorate studies, so there is a lot of brain power, I believe, and we have a common vision that is to create the best, first in class, biotech business in China.

Benzinga: Whats one objective you have as a CEO for 2017?

Liu: In 2017 is about clinical, clinical, clinical. We now have moved our first two indications into the clinical trial stage. We have a lot of patients lined up for clinical trials.

So, as CEO Ill make sure we mobilize all the resources around the clinical trials and make sure we have the lead PI, lead hospitals, and we have resources waiting in the company to make sure we have successful clinical trials. Those are key elements, and we are confident that we should be able to move forward, given the number of patients we have, move schedule, look at the indications

Benzinga: Are you comfortable with your cash and debt position? Do you have any plans to raise capital this year or any time soon?

Liu: One of the benefits we have, CBMG has been regarded as the leader in Chinas cell therapy space, so we have investors who have given us money for the last three years, always at a premium to the market. They know who we are; they know the space we are in. I feel as we move forward, we will be getting more investment needs from trials, and I feel confident investors will look at CBMG as a way for them to both put money into the research, but also, as an investment that could reap great returns.

Benzinga: Your stock had been performing pretty well, but experienced a tumble between mid-November and late-February. What happened there?

Liu: CBMGs stock is really thinly traded. Much of the stock is owned by those who have been with the company for a long time; so, they dont sell. Having said this, there are many reasons that drive stocks: the U.S. election, the pricing discussion Many investors dont discriminate, and just punish biotech as a whole. However, CBMG is not really subject to most of these pricing pressures. In fact, because we have a different cost structure, I expect CBMG to do extremely well.

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