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Champions Oncology Reports
Results for the Third Quarter Ended January 31, 2015
March 17, 2015 - Champions Oncology, Inc. (OTC: 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
Third Quarter and Recent
Business Highlights:
Joel Ackerman, Champions
Oncology CEO, stated, "We continue to make progress in building our TumorGraft platform and executing our strategy. Bookings
in the core TOS business were strong for a second consecutive quarter as a result of the investments we have made in the TumorBank
and commercial infrastructure. We are confident this bookings growth will result in a significant revenue increase next quarter.
The $14 million of capital we raised last week gives us the runway we need to deliver on our strategic plan and continue on the
path to profitability."
For the third quarter of
2015, revenue was $1.8 million, as compared to $3.7 million for the three months ended January 31, 2014, a decrease of $1.9 million
or (50.4%). For the nine months ended January 31, 2015, revenue was $5.6 million as compared to $9.1 million for the nine months
ended January 31, 2014, a decrease of (38.1%). Total operating expenses for the third quarter 2015 were $5.2 million, as compared
to $5.1 million for the three months ended January 31, 2014, an increase of 2.9%. For the nine months ended January 31, 2015, total
operating expenses were $16.5 million as compared to $13.0 million for the nine months ended January 31, 2014, an increase of 26.8%.
For the third quarter of
2015, Champions reported a loss from operations of $3.4 million as compared to a loss from operations of $1.4 million for the three
months ended January 31, 2014. Excluding stock-based compensation of $0.7 million and $0.9 million for the three months ended January
31, 2015 and 2014, Champions recognized a net loss of $2.8 million and $0.5 million respectively. For the nine months ended January
31, 2015, Champions reported a loss from operations of $10.8 million as compared to a loss from operations of $3.9 million for
the nine months ended January 31, 2014. Excluding stock-based compensation of $2.3 million and $2.0 million for the nine months
ended January 31, 2015 and 2014, Champions recognized a net loss of $8.6 million and $1.9 million respectively.
Personalized Oncology
The number of implants
during the quarter was 97 consisting of 42 commercial implants and 55 implants from research partnerships and trials. Total implants
increased 26% over the same period last year with a 175% increase in implants from research partnerships. The increase in research
implants was the result of focused efforts to expand our TumorBank by partnering with academic medical centers. These implants
will further the Company's efforts to build our platform to scale.
POS revenue was $453,000
and $590,000 for the three months ended January 31, 2015 and 2014, respectively, a decrease of $137,000 or (23.2%). Core revenue
from its TumorGraft technology platform decreased $20,000 or (5%). This decrease is due to a 26% decline in implant revenue resulting
from a 26% decline in commercial implant volume. Panel revenue increased by $8,000 or 3%. Non-core revenue decreased $116,000 or
POS cost of sales was $674,000
and $614,000 for the three months ended January 31, 2015 and 2014, respectively, an increase of $60,000 or 9.8%. For the three
months ended January 31, 2015 and 2014, gross margins for POS were -48.8% and -4.1%, respectively. The decline in gross margin
is attributed to the decline in POS revenue and a large fixed cost component to the cost of sales.
Translational Oncology
TOS revenue was $1.4 million
and $3.1 million for the three months ended January 31, 2015 and 2014, respectively, a decrease of $1.7 million, or (55.6%). The
decline is largely due to a $1.9 million licensing agreement signed in the third quarter of 2014 and immediate revenue recognition
TOS cost of sales was $1.3
million and $1.0 million for the three months ended January 31, 2015 and 2014, respectively, an increase of $0.29 million, or 29.1%.
For the three months ended January 31, 2015 and 2014, gross margin for TOS was 5.5% and 67.5%, respectively. Gross margin for the
quarter ended January 31, 2015 was below usual levels because of an increase in new TOS studies whose revenues will be recognized
upon study completion.
Research and development
expense was $1.1 million and $0.5 million for three months ended January 31, 2015 and 2014, respectively, an increase of $0.6 million,
or 100.4%. This increase reflects the continued investment in characterizing the TumorBank. Sales and marketing expense for the
three months ended January 31, 2015 and 2014 was $1.1 million and $0.8 million respectively, an increase of $0.3 million, or 33.3%.
The increase was the result of the expansion of the TOS sales force. General and administrative expense for the three months January
31, 2015 and 2014 was $1.1 million and $2.1 million, respectively a decrease of $1.0 million, or (48.8%). The decline is due to
the implementation of cost saving measures to reduce the Company's cash burn. Additionally, a one-time charge in stock based
compensation expense was taken in the third quarter of 2014.
Conference Call Information
The Company will host
a conference call today at 9:00 a.m. EDT (6:00 a.m. PDT) to discuss its third quarter 2015 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 Oncology."
of the Company's financial results will be available Tuesday,
March 17, 2015 in the Company's Form 10-Q at www.championsoncology.com.
* Non-GAAP Financial
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, 2015 and 2014. 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 net 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, 2014 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