HACKENSACK, N.J., Sept. 14, 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 first quarter ended July 31, 2017.
First Quarter and Recent Business Highlights:
- Record quarterly revenue of $5.0
million, an increase of 37.1% year-over-year
- Record Translational Oncology Services ("TOS") revenue of
$4.6 million, an increase of 45.4%
year-over-year
- Engaged in a multi-year, strategic collaboration with
AstraZeneca to develop models to be used in oncology R&D
programs for breast and lung cancer
- Collaborated with The Addario Lung Cancer Medical Institute
("ALCMI") to develop models in patients with ROS1 gene
rearrangement
- Reiterated expectations for fiscal year 2018 revenue growth of
at least 20% over fiscal year 2017
Ronnie Morris, CEO of Champions,
commented, "We delivered substantial increases in revenue and
bookings for the first fiscal quarter and reduced our operating
expenses both sequentially and year-over-year, reinforcing our
confidence in achieving operating profitability for fiscal year
2018. Interest in our products and services drove quarterly
revenues to more than $5 million for
the first time in our history. We are rapidly approaching an
inflection point in our business model where we expect the volume
of solutions we sell to generate revenue that will soon exceed our
total expenses, which are largely fixed. The first quarter included
approximately $100,000 in
non-recurring expenses related to the move to our new lab
facility in Maryland, a move
we expect will save approximately $1
million a year in a combination of fixed and variable costs
based on current revenue levels beginning November 1, 2017. Excluding these one-time
expenses and non-cash stock compensation expense, we would have
realized income from operations for the quarter, a solid marker
towards achieving sustained, similar quarterly result in the second
half of fiscal 2018."
"Our multi-year collaboration with AstraZeneca and a research
collaboration with Addario further expands the size, uniqueness and
value of our TumorBank while also increasing our total addressable
market to provide additional future growth opportunities," added
Morris. "These relationships illustrate the breadth of our
capabilities, the value we provide to our clients in their
pre-clinical and clinical drug development research and the
opportunities within our market."
Financial Results
For the first quarter of fiscal 2018, revenue increased 37.1% to
$5 million, as compared to
$3.7 million for the first quarter
2017. Total operating expenses for the first quarter fiscal 2018
and 2017 was $5.7 million and
$6.2 million, respectively, a
decrease of $500,000 or (8.7%).
For the first quarter of fiscal 2018, Champions reported a loss
from operations of $619,000,
including $564,000 in stock-based
compensation, an improvement of $1.9
million or (75.5%) compared to the loss from operations of
$2.5 million, inclusive of
$1.1 million in stock-based
compensation, in the first quarter of fiscal 2017.
For the first quarter of fiscal 2018 and 2017, Champions
reported a loss from operations of $619,000 and $2.5
million, respectively, a decrease of $1.9 million or (75.5%). Excluding stock-based
compensation of $564,000 and
$1.1 million for the three months
ended July 31, 2017 and 2016,
respectively, Champions recognized a loss from operations of
$55,000 and $1.4 million for first quarter 2018 and 2017,
respectively.
The first quarter included approximately $100,000 in non-recurring expenses related to the
new move to our new lab facility, a move the Company expects will
save approximately $1 million a year
off of current revenue levels beginning November 1, 2017. Excluding these one-time
expenses and stock based compensation, the Company would have
generated positive net income from operations.
Net cash used in operations was $1.9
million and $2.4 million for
the three months ended July 31, 2017
and 2016, respectively, a decrease of $500,000 or (20.1%). The reduction in cash burn
is the result of revenue growth and aggressive expense management;
however, the total cash outflows for the quarter were mainly the
result of fixed asset investments for our new lab facility along
with a reduction in deferred revenue.
The Company ended the quarter with $430,000 of cash and cash equivalents. Despite
the cash burn in the first quarter, the Company reiterates its
position that it does not intend to raise capital in the equity
market.
Translational Oncology Services (TOS) revenue was $4.6 million for the three months ended
July 31, 2017 compared to and
$3.2 million for the three months
ended July 31, 2016, respectively, an
increase of $1.4 million or 45.4%.
The increase is due to continued strength in bookings from prior
quarters, both in the number and size of the studies.
TOS cost of sales was $2.3 million
for the three months ended July 31,
2017, an increase of $300,000,
or 10.1%, compared to $2.0 million
for the three months ended July 31,
2016. For the three months ended July
31, 2017 and 2016, gross margin for TOS was 50.9% and 35.1%,
respectively. The increase in TOS cost of sales was due to an
increase in the number and size of TOS studies. While gross margin
often fluctuates quarter to quarter, resulting from timing
differences between revenue and expense recognition, 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.
Personalized Oncology Services (POS) revenue was $439,000 and $511,000 for the three months ended July 31, 2017 and 2016, respectively, a decrease
of $72,000 or (14.1%). The decrease
is due mainly to a decrease in implant and drug panel revenue of
$48,000 and $17,000, respectively.
POS cost of sales was $387,000 for
the three months ended July 31, 2017,
a decrease of $87,000, or (18.4%),
compared to $474,000 for the three
months ended July 31, 2016. For the
three months ended July 31, 2017 and
2016, gross margin for POS was 11.8% and 7.2%, respectively. The
improvement is attributed to the increase in higher margin
sequencing revenue and aggressive management of lab-related
costs.
Research and development expense was $1.1
million for the three months ended July 31, 2017, a decrease of $100,000, or (7.7%), compared to $1.2 million for the three months ended
July 31, 2016. Sales and marketing
expense for the three months ended July 31,
2017 was $683,000, a decrease
of $242,000, or (26.2%), compared to
$925,000 for the three months ended
July 31, 2016. The decrease is mainly
due to a reduction in stock based compensation expense. General and
administrative expense was $1.2
million for the three months ended July 31, 2017, a decrease of $300,000 or (21.2%), compared to $1.5 million for the three months ended
July 31, 2016. The decrease is mainly
due to the decrease in stock based compensation expense.
Conference Call Information:
The Company will host a conference call today at 5 p.m. EST (2:00 p.m.
PST) to discuss its first quarter financial results. To
participate in the call, please call 866-682-6100 (domestic) or
404-267-0373 (international) 10 minutes ahead of the call and
give the verbal reference "Champions Oncology."
Full details of the Company's financial results will be
available Thursday, September 14,
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 July 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,
2017 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
July
31,
|
|
2017
|
|
2016
|
Net loss -
GAAP
|
$
|
(674)
|
|
$
|
(2,546)
|
Less:
|
|
|
|
Stock-based
compensation
|
564
|
|
1,129
|
Net loss -
non-GAAP
|
$
|
(110)
|
|
$
|
(1,417)
|
|
|
Reconciliation of
GAAP EPS to Non-GAAP EPS (Unaudited)
|
|
|
Three Months
Ended
July 31,
|
|
2017
|
|
2016
|
EPS – GAAP
|
$
|
(0.06)
|
|
$
|
(0.26)
|
Less:
|
|
|
|
Effect of stock-based
compensation on EPS
|
0.05
|
|
0.11
|
EPS -
non-GAAP
|
$
|
(0.01)
|
|
$
|
(0.15)
|
|
|
Condensed
Consolidated Statements of Operations (Unaudited)
|
|
|
Three Months
Ended
July 31,
|
|
2017
|
|
2016
|
TOS operating
revenue
|
4,594
|
|
3,159
|
POS operating
revenue
|
$
|
439
|
|
$
|
511
|
Total operating
revenue
|
$
|
5,033
|
|
$
|
3,670
|
Cost of
TOS
|
2,255
|
|
2,049
|
Cost of
POS
|
387
|
|
474
|
Research and
development
|
1,118
|
|
1,211
|
Sales and
marketing
|
683
|
|
925
|
General and
administrative
|
1,209
|
|
1,534
|
Loss from
Operations
|
$
|
(619)
|
|
$
|
(2,523)
|
Other
(Expense)
|
(51)
|
|
(9)
|
Net Loss before
provision for income taxes
|
$
|
(670)
|
|
$
|
(2,532)
|
Income
taxes
|
4
|
|
14
|
Net
Loss
|
$
|
(674)
|
|
$
|
(2,546)
|
Condensed
Consolidated Balance Sheets as of (Unaudited)
|
|
|
July 31,
2017
|
|
April
30,
2017
|
Cash and cash
equivalents
|
$
|
430
|
|
|
$
|
3,295
|
|
Accounts
receivable
|
2,667
|
|
|
2,274
|
|
Other current
assets
|
360
|
|
|
300
|
|
Total current
assets
|
3,457
|
|
|
5,869
|
|
|
|
|
|
Restricted
cash
|
150
|
|
|
150
|
|
Property and
equipment, net
|
2,084
|
|
|
1,216
|
|
Other long term
assets
|
107
|
|
|
107
|
|
Goodwill
|
669
|
|
|
669
|
|
Total
assets
|
$
|
6,467
|
|
|
$
|
8,011
|
|
Accounts payable and
accrued liabilities
|
$
|
2,283
|
|
|
$
|
2,537
|
|
Deferred
revenue
|
3,737
|
|
|
4,910
|
|
Total current
liabilities
|
6,020
|
|
|
7,447
|
|
Other Non-current
Liability
|
157
|
|
|
164
|
|
Stockholders'
equity
|
290
|
|
|
400
|
|
Total liabilities
and stockholders' equity
|
$
|
6,467
|
|
|
$
|
8,011
|
|
Condensed
Consolidated Statements of Cash Flows (Unaudited)
|
|
|
Three Months
Ended
July 31,
|
|
2017
|
|
2016
|
Cash flows from
operating activities:
|
|
|
|
Net Loss
|
$
|
(674)
|
|
|
$
|
(2,546)
|
|
Adjustments to
reconcile net cash used in operations:
|
|
|
|
Stock-based
compensation expense
|
564
|
|
|
1,129
|
|
Issuance of common
stock for services
|
—
|
|
|
15
|
|
Depreciation and
amortization expense
|
42
|
|
|
45
|
|
Allowance for
doubtful accounts
|
14
|
|
|
(2)
|
|
Changes in operating
assets and liabilities
|
(1,894)
|
|
|
(1,080)
|
|
Net cash used in
operating activities
|
(1,948)
|
|
|
(2,439)
|
|
|
|
|
|
Cash flows from
investing activities:
|
|
|
|
Purchases of property
and equipment
|
(910)
|
|
|
(17)
|
|
Net cash used in
investing activities:
|
(910)
|
|
|
(17)
|
|
|
|
|
|
Cash flows from
financing activities:
|
|
|
|
Public Offering June
2016, net of financing costs of $742,000
|
—
|
|
|
4,340
|
|
Capital lease
payments
|
(7)
|
|
|
(6)
|
|
Net cash provided
by (used in) financing activities:
|
(7)
|
|
|
4,334
|
|
|
|
|
|
Increase (decrease)
in cash and cash equivalents
|
(2,865)
|
|
|
1,878
|
|
Cash and cash
equivalents, beginning of period
|
3,295
|
|
|
2,585
|
|
Cash and cash
equivalents, end of period
|
$
|
430
|
|
|
$
|
4,463
|
|
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content:http://www.prnewswire.com/news-releases/champions-oncology-reports-record-quarterly-revenue-of-5-million-300519983.html
SOURCE Champions Oncology, Inc.