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Wednesday, 07/18/2012 6:40:36 PM

Wednesday, July 18, 2012 6:40:36 PM

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Champions Oncology Reports Financial Results for the Year Ended April 30, 2012

HACKENSACK, N.J., July 18, 2012 /PRNewswire via COMTEX/ -- Champions Oncology,
Inc. (OTC: CSBR), formerly Champions Biotechnology, Inc., engages in the
development of advanced technology solutions and services to personalize the
development and use of oncology drugs, announced today its financial results for
the year ended April 30, 2012.

Joel Ackerman, the CEO of Champions Oncology, stated, "Fiscal 2012 was a year of
great progress for the company. We demonstrated our ability to drive significant
volume growth in both sides of our business. We continue to evolve our strategic
direction to better align the strength of our technology platform with the needs
of the market. Within this new approach, we made significant progress in
expanding our customer base and building a solid operational foundation for the
future."

Operating revenues were $7.1 million and $6.9 million for the years ended April
30, 2012 and 2011, respectively.

Total operating expenses were $16.2 million and $12.1 million for the years
ended April 30, 2012 and 2011, respectively.

Champions reported a net loss of $8.7 million, or ($0.19) per share and $3.8
million, or ($0.11) per share for the years ended April 30, 2012 and 2011,
respectively.

Excluding stock based compensation of $3.3 million, Champions recognized a net
loss of $5.3* million, or ($0.11*) per share, and excluding stock based
compensation of $3.1 million, a net loss of $0.7* million, or ($0.02*), per
share for the years ended April 30, 2012 and 2011, respectively.

During fiscal 2012, we modified our POS business strategy to focus on growing
our core technology products, which includes TumorGraft implants and drug
studies. As part of this strategy, we significantly reduced the price of our
core technology products to make the products affordable to a broader patient
base and to accelerate the growth of our Tumorbank. In addition, we have
increased spending on sales and marketing efforts to support this strategy. We
will continue to offer related personalized oncology services to our customers;
however, we expect future POS revenues to be driven by our core products.

During the second half of fiscal 2012, we transitioned the laboratory activities
that support the POS and TOS businesses from a third-party contract research
organization ("CRO") to our facility in Baltimore, Maryland. We believe that
bringing these activities in-house will significantly reduce the future cost of
providing our services and allow us to implement and maintain a more competitive
pricing strategy. To facilitate this strategy and support the increase in
current and expected volume, we have invested in the infrastructure and
increased our laboratory staff.

Furthermore, as part of our modified strategy, we plan to use TumorGrafting as a
platform technology to drive multiple synergistic revenue streams. We continue
to build this platform with investments in research and development, as well as
contributions from both the POS and TOS businesses. The platform is then used to
deliver products that serve both the POS and TOS customers in synergistic ways.
The result is well-differentiated products for patients, physicians, and drug
development companies. In addition, we are looking for additional opportunities
to utilize the data we are gathering to develop proprietary biomarkers and
signatures of response that can predict the resistance or sensitivity of
individual tumors to oncology drugs.

Operating Results

TOS revenues were $4.8 million and $3.5 million for the years ended April 30,
2012 and 2011, respectively, an increase of $1.3 million or 38%. The increases
in TOS revenues were due primarily to increased sales efforts and investments in
growing our Tumorbank.

Cost of TOS was $2.5 million and $1.8 million for the years ended April 30, 2012
and 2011, respectively, an increase of $0.7 million, or 38%. The increase in
costs was due to the increased volume of the TOS business. Gross margin for TOS
was 47% for the years ended April 30, 2012 and 2011.

POS revenues were $2.3 million and $3.4 million for the years ended April 30,
2012 and 2011, respectively, a decrease of $1.1 million, or 31%. Panel revenue,
a component of POS revenue, decreased $1.2 million from the prior year, which is
primarily attributable to a decrease in pricing per panel. Excluding panel
revenue, POS revenue was $1.8 million and $1.7 million for the years ended April
30, 2012 and 2011, respectively, an increase of $0.1 million. During fiscal
2012, the Company experienced significantly higher volumes of implants and drug
studies compared to fiscal 2011. For the year ended April 30, 2012, the Company
performed 97 TumorGraft implants, compared to 12 in the prior year. For the year
ended April 30, 2012, the Company completed 19 drug studies, compared to 5 in
the prior year. The increase in volume was offset by decreased pricing for both
the TumorGraft implants and drug studies, as part of our strategic decision to
accelerate the growth of our Tumorbank.

Cost of POS was $2.4 million and $1.7 million for the years ended April 30, 2012
and 2011, respectively, an increase of $0.7 million, or 42%. Gross margin for
POS was -1% and 51% for the years ended April 30, 2012 and 2011, respectively.
Gross margins declined due to the strategic decision to decrease prices to drive
increased volumes. Additionally, during the second half of fiscal 2012, the
Company transitioned its laboratory work in-house from a third-party CRO. While
this has resulted in increased costs during the transition, it is expected to
yield future savings. Finally, costs related to POS studies are expensed as
incurred, so expenses include ongoing costs related to 11 drug studies in
progress at April 30, 2012.

Research and development expense was $2.9 million for the years ended April 30,
2012 and 2011. Our research and development efforts are focused on growing our
Tumorbank, increasing our understanding of our TumorGraft models, their clinical
predictability, improving growth and tumor take rates, and other biological and
molecular characteristics of the models. In fiscal 2012, we increased these
efforts, but this was offset by decreased expenses incurred on testing
in-licensed compounds.

Sales and marketing expense was $2.9 million and $1.1 million for the years
ended April 30, 2012 and 2011, respectively, an increase of $1.8 million, or
170%. The increase for fiscal 2012 is primarily related to employee costs
associated with increases in our sales force and marketing expenses incurred in
connection with growing our POS and TOS businesses in the United States and in
our overseas operations.

General and administrative expense was $5.5 million and $4.6 million for the
years ended April 30, 2012 and 2011, respectively, an increase of $0.9 million,
or 18%. Stock-based compensation expense relating to general and administrative
expense was $3.0 million and $2.9 million for the years ended April 30, 2012 and
2011, respectively. Excluding stock-based compensation, general and
administrative expense increased $0.8 million, which primarily relates to the
expansion of our infrastructure, the addition of our corporate offices in New
Jersey, and other costs associated with the Company's growth strategy.

The Company's cash position on April 30, 2012 was $4.8 million.

* 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 loss per share amounts for the fiscal years ended 2012 and 2011,
respectively. 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. We define non-GAAP diluted loss per share amounts as
non-GAAP net loss divided by the weighted average number of diluted shares
outstanding. Our definition of non-GAAP net loss and non-GAAP diluted loss per
share may differ from similarly named measures used by others.

Full details of the Company's financial results will be available in the
Company's Form 10-K at www.championsoncology.com.

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. The Company uses this technology in conjunction with
related services to offer solutions for two customer groups: Personalized
Oncology Solutions ("POS") in which physicians and patients looking for
information help guide the development of personalized treatment plans, and
Translational Oncology Solutions ("TOS") in which pharmaceutical and biotech
companies seeking personalized approaches to drug development can lower the cost
and increase the speed of developing new drugs and increasing the adoption of
existing drugs. The Company's Tumorgraft Technology Platform consists of
processes, physical tumors and information that we use to personalize the
development and use of oncology drugs. The Company is building its Tumorgraft
Technology Platform through the procurement, development and characterization of
numerous Tumorgrafts within each of several cancer types. Tumorgrafts are
procured through agreements with a number of institutions in the U.S. and
overseas as well as through its POS business. The Tumorgrafts are developed and
tested in the Company's laboratory facility in Baltimore, Maryland.

Our POS business offers physicians and patients information to help guide the
development of personalized treatment plans. Our core offering utilizes our
technology platform to empirically test the response of a patient's tumor to
multiple oncology drugs or drug combinations. The process begins by implanting a
fresh fragment of the patient's tumor, typically received within 24 hours of
surgery or biopsy, in a small colony of immune-deficient mice to grow the tumor
tissue. This colony is then expanded by implanting the grown tumor tissue into
subsequent generations of mice until a sufficient number of mice are available
for testing. At that point, the colony is allocated to different groups, and
each mouse in a group is dosed with a different drug or drug combination. The
response of the tumor in each mouse is tracked over time and analyzed to
determine which drug or drug combination is providing the highest level of tumor
growth inhibition. Our data demonstrates that there is a high correlation
between the response to drugs of the tumor in mice with the response of the
tumor in the patient.

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, 2012 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

Year Ended

April 30

2012 2011

Net loss - GAAP ($8,661) ($3,802)

Less: 3,323 3,133

Stock-based compensation

Net loss - non-GAAP ($5,338) ($669)




Reconciliation of GAAP to Non-GAAP Earnings Per Share (EPS)

Year Ended

April 30

2012 2011

EPS - GAAP ($0.19) ($0.11)

Less: 0.08 0.09

Effect of stock-based compensation on EPS

EPS - non-GAAP ($0.11) ($0.02)




Condensed Consolidated Income Statements (Unaudited)

Year Ended

April 30

2012 2011 % Change

POS operating revenue $2,332 $3,382 -31%

TOS operating revenue 4,817 3,500 38%

Total operating revenue $7,149 $6,882 4%



Cost of POS 2,356 1,665 42%

Cost of TOS 2,543 1,846 38%

Research and development 2,937 2,910 1%

Sales and marketing 2,928 1,085 170%

General and administrative 5,450 4,611 18%



Loss from Operations ($9,065) ($5,235) 73%



Other Income 402 1,444 -72%



Net Loss before income tax expense ($8,663) ($3,791) 129%

Income taxes (2) 11 -118%

Net Loss ($8,661) ($3,802) 128%



Earnings per share- basic and diluted ($0.19) ($0.11) 73%

Average Shares outstanding- basic and diluted 46,815,000 33,774,000




Condensed Consolidated Balance Sheets (Unaudited)

At

April 30,

2012 2011

Cash and cash equivalents $4,754 $10,457

Accounts receivable 584 585

Other current assets 205 793

Total current assets 5,543 11,835



Restricted cash 150 -

Property and equipment, net 560 146

Goodwill 669 669

Total assets $6,922 $12,650



Accounts payable and accrued liabilities $2,301 $1,882

Deferred revenue 1,185 1,618

Total current liabilities 3,486 3,500



Warrant liability 555 972

Redeemable common stock 8,159 8,159

Stockholders' equity (deficit) (5,278) 19

Total liabilities, redeemable common stock and stockholders' equity (deficit) ($6,922) ($12,650)




Condensed Consolidated Statements of Cash Flows (Unaudited)

Year Ended

April 30

2012 2011

Cash flows from operating activities:

Net Loss ($8,661) ($3,802)

Adjustments to reconcile net cash used in operations:

Stock-based compensation expense 3,323 3,133

Depreciation expense 105 42

Change in fair value of warrant liability (417) 36

Other adjustments (2) 12

Changes in operating assets and liabilities 425 525

Net cash used in operating activities (5,227) (54)



Cash flows from investing activities:

Purchases of and proceeds from sales of property and equipment (519) (84)

Net cash used in investing activities: (519) (84)



Cash flows from financing activities:

Private placement of common shares and warrants (net of $305 in offering costs) - 9,095

Purchase of treasury stock - (1,033)

Proceeds from exercise of options and warrants 97 21

Net cash provided by financing activities: 97 8,083



Exchange rate effect on cash and cash equivalents (54) (60)

Increase (decrease) in cash and cash equivalents (5,703) 7,885

Cash and cash equivalents, beginning of year 10,457 2,572

Cash and cash equivalents, end of year $4,754 $10,457



Contact: Susan Foreman410-369-0365 X140

SOURCE Champions Oncology, Inc.



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