HACKENSACK, N.J., March 15, 2016 /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, 2016.
Third Quarter and Recent Business Highlights:
- Delivered record core bookings of new contracts to pharma and
biotech customers
- TOS revenue growth of 55%
- Launched AML product line
- Reduced cash burn to under $1M
for the quarter
- Initiated sponsored correlative trial of TumorGraft® PDX models
in sarcoma patients
Joel Ackerman, Champions Oncology
CEO, stated, "This was a great quarter for Champions. We are
executing against our strategy and the results have been
excellent. Our revenue growth remains very strong and our
cash burn rate is coming down quickly as we predicted. The
pharmaceutical and biotech industry is embracing the depth and
breadth of our platform and the leading indicators for future
growth are very strong."
Financial Results
Revenue was $2.6 million and
$1.8 million for the three months
ended January 31, 2016 and 2015,
respectively, an increase of $800,000
or 39.5%. Revenue was $8.3 million
and $5.6 million for the nine months
ended January 31, 2016 and 2015,
respectively, an increase of $2.7
million or 48.4%. Total operating expense was $4.9 million and $5.2
million for the three months ended January 31, 2016 and 2015, respectively, a
decrease of $300,000 or (6.2%). Total
operating expense was $16.1 million
and $16.5 million for the nine months
ended January 31, 2016 and 2015,
respectively, a decrease of $400,000
or (2.1%).
Champions reported a loss before income tax expense of
$2.4 million and $2.8 million for the three months ended
January 31, 2016 and 2015,
respectively, a decrease of $400,000
or (15.1%). Excluding stock-based compensation of $567,000 and $657,000 for the three months ended January 31, 2016 and 2015, Champions recognized a
net loss of $1.8 million and
$2.2 million, respectively.
Champions reported a loss before income tax expense of
$7.8 million and $9.4 million for the nine months ended
January 31, 2016 and 2015,
respectively, a decrease of $1.6
million or (17.4%). Excluding stock-based compensation of
$2.1 million and $2.3 million for the nine months ended
January 31, 2016 and 2015, Champions
recognized a net loss of $5.8 million
and $7.2 million, respectively.
Net cash used in operations was $864,000 and $2.4
million for the three months ended January 31, 2016 and 2015, respectively, a
decrease of $1.5M or (64%). The
reduction in cash burn is the result of revenue growth, aggressive
expense management and payments received in advance of revenue
recognition.
Operating Results
Translational Oncology Solutions (TOS):
TOS revenue was $2.1 million and
$1.4 million for the three months
ended January 31, 2016 and 2015,
respectively, an increase of $700,000, or 55.2%. The increase is due to
increased bookings, both in the number and size of the studies, in
prior quarters due to the expansion of the TOS sales team and
growth of the platform.
TOS cost of sales was $1.6 million
and $1.3 million for the three months
ended January 31, 2016 and 2015,
respectively, an increase of $300,000, or 25.1%. Gross margin was 23.8% and
5.5% for the three months ended January 31,
2016 and 2015, respectively. Quarterly gross margins vary
based on timing differences between expense and revenue
recognition. The improvement in gross margin was due to higher TOS
revenue leveraged off the fixed cost component of the lab combined
with effective management of the variable lab costs.
Personalized Oncology Solutions (POS):
POS revenue was $416,000 and
$453,000 for the three months ended
January 31, 2016 and 2015,
respectively, a decrease of $37,000
or (8.2%). The decrease is due to a decline of $215,000 in implant and panel revenue offset by
an increase of $162,000 in sequencing
revenue.
POS cost of sales was $479,000 and
$674,000 for the three months ended
January 31, 2016 and 2015,
respectively, a decrease of $195,000,
or (28.9%). Gross margin was (15.1%) and (48.8%) for the three
months ended January 31, 2016 and
2015, respectively. The improvement resulted from a shift to a
higher margin revenue product contributing to POS revenue and
aggressively managing our lab costs.
Research and development expense was $1
million and $1.1 million for
three months ended January 31, 2016
and 2015, respectively, a decrease of $100,000, or (8.6%). The decrease is due to lower
expenses in genomic characterization of our Champions TumorGraft®
Bank for the current quarter.
Sales and marketing expense for the three months ended
January 31, 2016 and 2015 was
$779,000 and $1.1 million, respectively, a decrease of
$321,000 or (28.8%). The decrease is
due to the consolidation of the sales and marketing resources of
the POS and TOS division, including combining both under one
commercial business leader.
General and administrative expense for the three months
January 31, 2016 and 2015 was
$1.04 million and $1.09 million, respectively, a decrease of
$50,000, or (4.1%).
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 2016 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."
Full details of the Company's financial results will be
available Wednesday, March 16, 2016
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 and nine months ended January
31, 2016 and 2015. 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 Champions
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 Champions 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,
2015 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 Loss (Unaudited):
|
|
|
Three Months
Ended
January 31,
|
|
Nine Months
Ended
January 31,
|
2016
|
|
2015
|
|
2016
|
|
2015
|
Net loss -
GAAP
|
($2,412)
|
|
($2,816)
|
|
($7,872)
|
|
($9,463)
|
Less:
|
|
|
|
|
|
|
|
Stock-based
compensation
|
567
|
|
657
|
|
2,090
|
|
2,284
|
Net (loss) income -
non-GAAP
|
($1,845)
|
|
($2,159)
|
|
($5,782)
|
|
($7,179)
|
Reconciliation of
GAAP EPS to Non-GAAP EPS (Unaudited):
|
|
|
Three Months
Ended
January 31,
|
|
Nine Months
Ended
January 31,
|
2016
|
|
2015
|
|
2016
|
|
2015
|
Basic EPS -
GAAP
|
($0.28)
|
|
($0.51)
|
|
($0.90)
|
|
($1.70)
|
Diluted EPS -
GAAP
|
(0.28)
|
|
(0.61)
|
|
(0.90)
|
|
(1.94)
|
Less:
|
|
|
|
|
|
|
|
Effect of
stock-based compensation on EPS
|
0.07
|
|
0.12
|
|
0.24
|
|
0.41
|
Basic EPS -
non-GAAP
|
($0.21)
|
|
($0.39)
|
|
($0.66)
|
|
($1.29)
|
Diluted EPS -
non-GAAP
|
($0.21)
|
|
($0.49)
|
|
($0.66)
|
|
($1.53)
|
Condensed
Consolidated Statements of Operations (Unaudited):
|
|
|
Three Months
Ended
January 31,
|
|
Nine Months
Ended
January 31,
|
2016
|
|
2015
|
|
2016
|
|
2015
|
POS operating
revenue
|
$416
|
|
$453
|
|
$1,387
|
|
$1,245
|
TOS operating
revenue
|
2,136
|
|
1,376
|
|
6,958
|
|
4,377
|
Total
operating revenue
|
$2,552
|
|
$1,829
|
|
$8,345
|
|
$5,622
|
|
|
|
|
|
|
|
|
Cost of
POS
|
479
|
|
674
|
|
1,661
|
|
2,190
|
Cost of
TOS
|
1,627
|
|
1,301
|
|
4,683
|
|
3,225
|
Research and
development
|
999
|
|
1,093
|
|
3,018
|
|
3,757
|
Sales and
marketing
|
779
|
|
1,094
|
|
2,688
|
|
3,340
|
General and
administrative
|
1,041
|
|
1,086
|
|
4,062
|
|
3,944
|
|
|
|
|
|
|
|
|
Loss from
Operations
|
($2,373)
|
|
($3,419)
|
|
($7,767)
|
|
($10,834)
|
|
|
|
|
|
|
|
|
Other (Expense)
Income
|
(8)
|
|
615
|
|
(29)
|
|
1,398
|
|
|
|
|
|
|
|
|
Net Loss
before income tax expense
|
($2,381)
|
|
($2,804)
|
|
($7,796)
|
|
($9,436)
|
Income
taxes
|
31
|
|
12
|
|
76
|
|
27
|
Net
Loss
|
($2,412)
|
|
($2,816)
|
|
($7,872)
|
|
($9,463)
|
Condensed
Consolidated Balance Sheets as of (Unaudited):
|
|
|
January
31,
|
|
April
30,
|
|
2016
|
|
2015
|
Cash and cash
equivalents
|
$3,293
|
|
$9,357
|
Accounts
receivable
|
2,105
|
|
1,060
|
Other current
assets
|
414
|
|
346
|
Total current
assets
|
5,812
|
|
10,763
|
|
|
|
|
Restricted
cash
|
150
|
|
163
|
Property and
equipment, net
|
514
|
|
452
|
Goodwill
|
669
|
|
669
|
Total
assets
|
$7,145
|
|
$12,047
|
|
|
|
|
Accounts payable and
accrued liabilities
|
$1,772
|
|
$1,787
|
Deferred
revenue
|
2,875
|
|
2,009
|
Total
current liabilities
|
4,647
|
|
3,796
|
|
|
|
|
Other Non-current
liabilities
|
239
|
|
192
|
Stockholders'
equity
|
2,259
|
|
8,059
|
Total
liabilities and stockholders' equity
|
$7,145
|
|
$12,047
|
Condensed
Consolidated Statements of Cash Flows (Unaudited):
|
|
|
Nine Months
Ended
|
January
31,
|
2016
|
|
2015
|
Cash flows from
operating activities:
|
|
|
|
Net Loss
|
($7,872)
|
|
($9,463)
|
Adjustments to
reconcile net cash used in operations:
|
|
|
|
Stock-based
compensation expense
|
2,090
|
|
2,284
|
Depreciation
expense
|
114
|
|
166
|
Provision for bad
debts
|
33
|
|
-
|
Change in fair value
of warrant liability
|
-
|
|
(1,401)
|
Changes in operating
assets and liabilities
|
(218)
|
|
792
|
Net cash used in
operating activities
|
(5,853)
|
|
(7,622)
|
|
|
|
|
Cash flows from
investing activities:
|
|
|
|
Purchases of property
and equipment
|
(176)
|
|
(84)
|
Net cash used in
investing activities
|
(176)
|
|
(84)
|
|
|
|
|
Cash flows from
financing activities:
|
|
|
|
Proceeds from
executive note financing
|
-
|
|
2,000
|
Proceeds from
exercise of options
|
-
|
|
2
|
Payment of issuance
costs related to 2015 Private Placement
|
(18)
|
|
-
|
Capital lease
payments
|
(17)
|
|
(5)
|
Net cash (used
in)/provided by financing activities
|
(35)
|
|
1,997
|
|
|
|
|
Decrease in cash and
cash equivalents
|
(6,064)
|
|
(5,709)
|
Cash and cash
equivalents, beginning of period
|
9,357
|
|
5,891
|
Cash and cash
equivalents, end of period
|
$3,293
|
|
$182
|
To view the original version on PR Newswire,
visit:http://www.prnewswire.com/news-releases/champions-oncology-reports-results-for-the-third-quarter-ended-january-31-2016-300236116.html
SOURCE Champions Oncology, Inc.