HACKENSACK, N.J., March 16, 2017 /PRNewswire/ -- Champions
Oncology, Inc. (Nasdaq: CSBR), engaged in the development of
advanced technology solutions and services to personalize the
development and use of oncology drugs, today announced its
financial results for the third quarter ended January 31, 2017.
Third Quarter and Recent Business Highlights:
- Revenue increased 40% year-over-year to $3.6 million
- 50% growth in Translation Oncology Solutions (TOS) segment
revenue
- Record quarterly bookings; 30% greater than previous record set
in first quarter fiscal 2017
- Expanded TOS product line by adding new unique cohorts of PDX
models to existing TumorBank
Ronnie Morris, CEO of Champions,
commented, "This was a solid quarter of execution for Champions,
with our strongest-ever quarterly bookings reinforcing management's
long-term confidence in the business. Year-over-year revenue growth
continued at a 40% pace, even while timing-related issues tied to
individual customers impacted our top line. The acceleration of our
bookings, combined with our ongoing efforts to reduce expenses,
reinforces our expectations for near-term profitability. In a few
quarters, we believe we will reach sustainable profitability, even
as we experience normal revenue volatility, while continuing our
level of investment in research and development.
"Our strong growth to date has been driven by our core
business," continued Morris. "We continue to invest in building new
models that reflect the evolving standard of care to provide robust
model cohorts for pre-clinical research and clinical trial
simulation. We have expanded our relevant TumorBank with more than
160 new and unique models in the past six months. We are planning
to expand our solution offerings with the expansion of
immune-oncology ('IO') clinical simulation and data analytics
solutions that we believe will accelerate our long term
growth."
Financial Results
For the third quarter of fiscal 2017, revenue was $3.6 million, as compared to $2.6 million for the third quarter 2016, an
increase of 39.7%. Total operating expenses for the third quarter
fiscal 2017 and 2016 was $5 million
and $4.9 million, respectively, an
increase of $100,000 or 0.8%. Revenue
was $11.7 million and $8.3 million for the nine months ended
January 31, 2017 and 2016,
respectively, an increase of $3.4
million or 40.1%.
For the third quarter of fiscal 2017 and 2016, Champions
reported a loss from operations of $1.4
million and $2.4 million,
respectively, a decrease of $1
million or (41.0%). Excluding stock-based compensation of
$237,000 and $567,000 for the three months ended January 31, 2017 and 2016, respectively,
Champions recognized a loss from operations of $1.2 million and $1.9 million for third quarter 2017 and 2016,
respectively.
For the nine months ended January 31,
2017 and 2016, Champions reported a loss from operations of
$4.4 million and $7.8 million, respectively, a decrease of
$3.4 million or (43.1%). Excluding
stock-based compensation of $1.9
million and $2.1 million for
the nine months ended January 31,
2017 and 2016, Champions recognized loss from operations of
$2.6 million and $5.8 million, respectively.
Net cash used in operations was $3.2 and $5.9
million for the nine months ended January 31, 2017 and 2016, respectively, a
decrease of $2.7 million or (44.7%).
The reduction in cash burn is the result of revenue growth and
aggressive expense management.
The company ended the quarter with $3.5
million of cash and cash equivalents on the balance
sheet.
Translational Oncology Services (TOS) revenue was $3.2 million and $2.1
million for the three months ended January 31, 2017 and 2016, respectively, an
increase of $1.1 million or 50.7%.
The increase is due to bookings growth in prior quarters, both in
the number and size of the studies.
TOS cost of sales was $2.1 million
and $1.6 million for the three months
ended January 31, 2017 and 2016,
respectively, an increase of $500,000, or 28.2%. For the three months ended
January 31, 2017 and 2016, gross
margin for TOS was 35.2% and 23.8%, respectively. The increase in
TOS cost of sales was due to an increase in TOS studies. The
improvement in gross margin was due to higher TOS revenue leveraged
off the fixed cost component of the lab and effective management of
the variable lab costs. Gross margin varies based on timing
differences between expense and revenue recognition. While the
gross margin improved, there are expenses incurred in advance of
future revenue.
Personalized Oncology Services (POS) revenue was $347,000 and $416,000 for the three months ended January 31, 2017 and 2016, respectively, a
decrease of $69,000 or (16.6%). The
decrease is due mainly to a decrease in sequencing revenue of
$63,000.
POS cost of sales was $320,000 and
$479,000 for the three months ended
January 31, 2017 and 2016,
respectively, a decrease of $159,000,
or (33.2%). For the three months ended January 31, 2017 and 2016, gross margin for POS
was 7.8% and (15.1%), respectively. The improvement is attributed
to the increase in higher margin sequencing revenue and
aggressively managing our lab costs.
Research and development expense was $1
million for both the three months ended January 31, 2017 and 2016. Sales and marketing
expense for the three months ended January
31, 2017 and 2016 was $726,000
and $779,000 respectively, a decrease
of $53,000, or (6.8%). General and
administrative expense was $836,000
and $1 million for the three months
ended January 31, 2017 and 2016,
respectively, a decrease of $164,000
or (19.7%). The decrease is primarily due to a decrease in stock
compensation expense.
Conference Call Information:
The Company will host a conference call today at 4:30 p.m. EDT (1:30 p.m.
PDT) to discuss its third quarter financial results. To
access the conference call, domestic participants should dial
800-875-3456, Canadian participants should dial 800-648-0973, and
international participants should dial 302-607-2001. The
participant passcode is "Champions".
Full details of the Company's financial results will be
available Friday March 17, 2017 in
the Company's Form 10-Q at www.championsoncology.com.
* Non-GAAP Financial Information
See the attached Reconciliation of GAAP net loss to non-GAAP net
loss for an explanation of the amounts excluded to arrive at
non-GAAP net loss and related non-GAAP net loss per share amounts
for the three months ended January 31,
2017 and 2016. Non-GAAP financial measures provide investors
and management with supplemental measures of operating performance
and trends that facilitate comparisons between periods before and
after certain items that would not otherwise be apparent on a GAAP
basis. Certain unusual or non-recurring items that management
does not believe affect the Company's basic operations do not meet
the GAAP definition of unusual or non-recurring items.
Non-GAAP net loss and non-GAAP loss per share are not, and should
not be viewed as a substitute for similar GAAP items.
Champions' defines non-GAAP dilutive loss per share amounts as
non-GAAP net loss divided by the weighted average number of diluted
shares outstanding. Champions' definition of non-GAAP net
loss and non-GAAP diluted loss per share may differ from similarly
named measures used by others.
About Champions Oncology, Inc.
Champions Oncology, Inc. is engaged in the development of
advanced technology solutions and services to personalize the
development and use of oncology drugs. The Company's
TumorGraft technology platform is a novel approach to personalizing
cancer care based upon the implantation of primary human tumors in
immune deficient mice followed by propagation of the resulting
engraftments, or TumorGrafts, in a manner that preserves the
biological characteristics of the original human tumor in order to
determine the efficacy of a treatment regimen. The Company
uses this technology in conjunction with related services to offer
solutions for two customer groups: Personalized Oncology
Solutions, in which results help guide the development of
personalized treatment plans, and Translational Oncology Solutions,
in which pharmaceutical and biotechnology companies seeking
personalized approaches to drug development can lower the cost and
increase the speed of developing new drugs. TumorGrafts are
procured through agreements with a number of institutions in the
U.S. and overseas as well as through Champions' Personalized
Oncology Solutions business. For more information, please visit
www.championsoncology.com.
This press release may contain "forward-looking statements"
(within the meaning of the Private Securities Litigation Act of
1995) that inherently involve risk and uncertainties.
Champions Oncology generally uses words such as "believe," "may,"
"could," "will," "intend," "expect," "anticipate," "plan," and
similar expressions to identify forward-looking statements.
One should not place undue reliance on these forward-looking
statements. The Company's actual results could differ
materially from those anticipated in the forward-looking statements
for many unforeseen factors. See Champions Oncology's Form
10-K for the fiscal year ended April 30,
2016 for a discussion of such risks, uncertainties and other
factors. Although the Company believes the expectations
reflected in the forward-looking statements are reasonable, they
relate only to events as of the date on which the statements are
made, and Champions Oncology's future results, levels of activity,
performance or achievements may not meet these expectations.
The Company does not intend to update any of the forward-looking
statements after the date of this press release to conform these
statements to actual results or to changes in Champions Oncology's
expectations, except as required by law.
Champions
Oncology, Inc.
(Dollars in
thousands except per share amounts)
|
|
Reconciliation of
GAAP to Non-GAAP Net Gain (Loss) (Unaudited)
|
|
|
|
|
Three Months
Ended
January
31,
|
|
Nine Months
Ended
January
31,
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
Net loss -
GAAP
|
$
|
(1,409)
|
|
|
$
|
(2,412)
|
|
|
$
|
(4,460)
|
|
|
$
|
(7,872)
|
|
Less:
|
|
|
|
|
|
|
|
Stock-based
compensation
|
237
|
|
|
567
|
|
|
1,901
|
|
|
2,090
|
|
Net loss -
non-GAAP
|
$
|
(1,172)
|
|
|
$
|
(1,845)
|
|
|
$
|
(2,559)
|
|
|
$
|
(5,782)
|
|
|
|
Reconciliation of
GAAP EPS to Non-GAAP EPS (Unaudited)
|
|
|
|
Three Months
Ended
January
31,
|
|
Nine Months
Ended
January
31,
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
EPS – GAAP
|
$
|
(0.13)
|
|
|
$
|
(0.28)
|
|
|
$
|
(0.44)
|
|
|
$
|
(0.90)
|
|
Less:
|
|
|
|
|
|
|
|
Effect of stock-based
compensation on EPS
|
0.02
|
|
|
0.07
|
|
|
0.19
|
|
|
0.24
|
|
EPS -
non-GAAP
|
$
|
(0.11)
|
|
|
$
|
(0.21)
|
|
|
$
|
(0.25)
|
|
|
$
|
(0.66)
|
|
|
|
Condensed
Consolidated Statements of Operations (Unaudited)
|
|
|
|
Three Months
Ended
January
31,
|
|
Nine Months
Ended
January
31,
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
TOS operating
revenue
|
3,218
|
|
|
2,136
|
|
|
10,337
|
|
|
6,958
|
|
POS operating
revenue
|
$
|
347
|
|
|
$
|
416
|
|
|
$
|
1,354
|
|
|
$
|
1,387
|
|
Total operating
revenue
|
$
|
3,565
|
|
|
$
|
2,552
|
|
|
$
|
11,691
|
|
|
$
|
8,345
|
|
Cost of
TOS
|
2,086
|
|
|
1,627
|
|
|
5,965
|
|
|
4,683
|
|
Cost of
POS
|
320
|
|
|
479
|
|
|
1,167
|
|
|
1,661
|
|
Research and
development
|
998
|
|
|
999
|
|
|
3,217
|
|
|
3,018
|
|
Sales and
marketing
|
726
|
|
|
779
|
|
|
2,369
|
|
|
2,688
|
|
General and
administrative
|
836
|
|
|
1,041
|
|
|
3,393
|
|
|
4,062
|
|
Loss from
Operations
|
$
|
(1,401)
|
|
|
$
|
(2,373)
|
|
|
$
|
(4,420)
|
|
|
$
|
(7,767)
|
|
Other
(Expense)
|
(8)
|
|
|
(8)
|
|
|
(33)
|
|
|
(29)
|
|
Net Loss before
provision for income taxes
|
$
|
(1,409)
|
|
|
$
|
(2,381)
|
|
|
$
|
(4,453)
|
|
|
$
|
(7,796)
|
|
Income
taxes
|
—
|
|
|
31
|
|
|
7
|
|
|
76
|
|
Net
Loss
|
$
|
(1,409)
|
|
|
$
|
(2,412)
|
|
|
$
|
(4,460)
|
|
|
$
|
(7,872)
|
|
Condensed
Consolidated Balance Sheets as of (Unaudited)
|
|
|
|
January
31,
2017
|
|
April
30,
2016
|
Cash and cash
equivalents
|
$
|
3,488
|
|
|
$
|
2,585
|
|
Accounts
receivable
|
2,026
|
|
|
1,312
|
|
Other current
assets
|
541
|
|
|
443
|
|
Total current
assets
|
6,055
|
|
|
4,340
|
|
|
|
|
|
Restricted
cash
|
150
|
|
|
150
|
|
Property and
equipment, net
|
672
|
|
|
618
|
|
Goodwill
|
669
|
|
|
669
|
|
Total
assets
|
$
|
7,546
|
|
|
$
|
5,777
|
|
Accounts payable and
accrued liabilities
|
$
|
1,651
|
|
|
$
|
2,167
|
|
Deferred
revenue
|
3,621
|
|
|
3,139
|
|
Total current
liabilities
|
5,272
|
|
|
5,306
|
|
Other Non-current
Liability
|
234
|
|
|
233
|
|
Stockholders'
equity
|
2,040
|
|
|
238
|
|
Total liabilities
and stockholders' equity
|
$
|
7,546
|
|
|
$
|
5,777
|
|
Condensed
Consolidated Statements of Cash Flows (Unaudited)
|
|
|
|
Nine Months
Ended
January
31,
|
|
2017
|
|
2016
|
Cash flows from
operating activities:
|
|
|
|
Net Loss
|
$
|
(4,460)
|
|
|
$
|
(7,872)
|
|
Adjustments to
reconcile net cash used in operations:
|
|
|
|
Stock-based
compensation expense
|
1,901
|
|
|
2,090
|
|
Issuance of common
stock
|
20
|
|
|
—
|
|
Depreciation and
amortization expense
|
127
|
|
|
114
|
|
Allowance for
doubtful accounts
|
—
|
|
|
33
|
|
Changes in operating
assets and liabilities
|
(826)
|
|
|
(218)
|
|
Net cash used in
operating activities
|
(3,238)
|
|
|
(5,853)
|
|
|
|
|
|
Cash flows from
investing activities:
|
|
|
|
Purchases of property
and equipment
|
(181)
|
|
|
(176)
|
|
Net cash used in
investing activities:
|
(181)
|
|
|
(176)
|
|
|
|
|
|
Cash flows from
financing activities:
|
|
|
|
Public Offering June
2016, net of financing costs of $742,000
|
4,340
|
|
|
—
|
|
Payment of issuance
costs related to 2015 Private Placement
|
—
|
|
|
(18)
|
|
Capital lease
payments
|
(18)
|
|
|
(17)
|
|
Net cash provided
by (used in) financing activities:
|
4,322
|
|
|
(35)
|
|
|
|
|
|
Increase (decrease)
in cash and cash equivalents
|
903
|
|
|
(6,064)
|
|
Cash and cash
equivalents, beginning of period
|
2,585
|
|
|
9,357
|
|
Cash and cash
equivalents, end of period
|
$
|
3,488
|
|
|
$
|
3,293
|
|
To view the original version on PR Newswire,
visit:http://www.prnewswire.com/news-releases/champions-oncology-reports-40-revenue-growth-300425131.html
SOURCE Champions Oncology, Inc.