Champions Oncology Reports Financial Results for the Quarter Ended October 31, 2012
HACKENSACK, N.J., Dec. 13, 2012 /PRNewswire via COMTEX/ -- Champions Oncology,
Inc. (OTC: CSBR), engaged 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 fiscal quarter ended October 31, 2012.
Joel Ackerman, Champions Oncology CEO, stated, "We continue to make progress in
increasing the number of TumorGrafts initiated and the size of our Tumorbank. We
expect these to drive increased value of our technology platform over the long
term."
Operating revenues were $1.5 million, as compared to $1.8 million for the three
months ended October 31, 2011. For the six months ended October 31, 2012 and
2011, operating revenues were $3.6 million and $3.4 million, respectively.
Total operating expenses were $3.4 million, as compared to $4.3 million for the
three months ended October 31, 2011. Operating expenses were $7.1 million, as
compared to $8.0 million for the six months ended October 31, 2011.
Champions reported a net loss of $2.0 million, or ($0.04) per share, as compared
to a net loss of $2.3 million, or ($0.05) per share, for the three months ended
October 31, 2011. For the six months ended October 31, 2012, Champions reported
a net loss of $3.3 million, or ($0.07) per share, as compared to a net loss of
$4.4 million, or ($0.09) per share, for the 2011 period.
Excluding stock-based compensation of $0.6 million and $0.9 million for the
three months ended October 31, 2012 and 2011, Champions recognized a net loss of
$1.4 million, or ($0.03) per share and a net loss of $1.5 million, or ($0.03)
per share for three months ended October 31, 2012 and 2011, respectively. For
the six months ended October 31, 2012 and 2011, excluding stock-based
compensation of $1.4 million and $1.9 million, Champions recognized a net loss
of $1.9 million, or ($0.04) per share and a net loss of $2.5 million, or ($0.05)
per share, respectively.
Operating Results
Personalized Oncology Solutions (POS) revenues were $0.5 million and $0.6
million for the three months ended October 31, 2012 and 2011, respectively, a
decrease of $0.1 million, or 17%. For the six months ended October 31, 2012 and
2011, POS revenues were $1.4 million and $1.2 million, respectively, an increase
of $0.2 million, or 17%. The increase in POS revenues was driven by an increased
number of drug studies completed during the six months ended October 31, 2012
compared to the same period in the previous year. During the six months ended
October 31, 2012 and 2011, the Company completed 22 and 5 drug studies,
respectively. These increases are the result of the steady increase in the
number of TumorGrafts performed which have moved onto drug studies.
POS cost of sales was $0.6 million and $0.5 million for the three months ended
October 31, 2012 and 2011, respectively, an increase of $0.1 million, or 20%.
For the six months ended October 31, 2012 and 2011, POS cost of sales was $1.4
million and $0.9 million, respectively, an increase of $0.5 million, or 56%. For
the three months ended October 31, 2012 and 2011, gross margins for POS were
-20% and 17%, respectively. For the six months ended October 31, 2012 and 2011,
gross margins for POS were 0% and 25%, respectively. The increases in cost of
sales and the declines in gross margins can be attributed to increased volumes
of implants and drug studies performed, in line with management's strategy to
obtain more tumors to increase our tumor model offerings to our TOS sponsors and
increase the number of models in our Tumorbank
Translational Oncology Solutions (TOS) revenues were $1.0 million and $1.2
million for the three months ended October 31, 2012 and 2011, respectively, a
decrease of $0.2 million, or 17%. The decrease in TOS revenues was due primarily
to decreased contract bookings in the previous quarters. TOS revenues were $2.2
million for each of the six month periods ended October 31, 2012 and 2011.
TOS cost of sales was $0.5 million and $0.6 million for the three months ended
October 31, 2012 and 2011, respectively, a decrease of $0.1 million, or 17%. For
the six months ended October 31, 2012 and 2011, TOS cost of sales was $1.2
million and $1.1 million, respectively, increase of $0.1 million, or 9%. For the
three months ended October 31, 2012 and 2011, gross margins for TOS were 50%.
For the six months ended October 31, 2012 and 2011, gross margins for TOS were
46% and 50%, respectively. The decline in gross margin for the six month period
can be attributed to additional costs associated with transitioning laboratory
activities in-house from a third-party contract research organization.
Specifically, we made additional investments in our infrastructure and our
laboratory staff to increase productivity and to support current and expected
volumes, which is expected to significantly reduce the future cost of providing
our services and allow us to maintain a more competitive pricing strategy.
Research and development expense was $0.4 million and $1.0 million for three
months ended October 31, 2012 and 2011, respectively, a decrease of $0.6
million, or 60%. For the six months ended October 31, 2012 and 2011, research
and development expense was $0.8 million and $1.6 million, respectively, a
decrease of $0.8 million, or 50%. This decrease is primarily related to
decreased laboratory maintenance costs associated with research and development
efforts, in line with our strategy to focus on our POS and TOS lines of
business. Additionally, the decrease can be attributed to decreased tumor
procurement costs, resulting from our strategy to source models from our POS
business.
Sales and marketing expense was $0.7 million for each of the three month periods
ended October 31, 2012 and 2011. For the six months ended October 31, 2012 and
2011, sales and marketing expense was $1.4 million and $1.3 million,
respectively, an increase of $0.1 million, or 8%.
General and administrative expense was $1.2 million and $1.5 million for the
three months ended October 31, 2012 and 2011, respectively, a decrease of $0.3
million, or 20%. For the six months ended October 31, 2012 and 2011, general and
administrative expense was $2.3 million and $3.1 million, respectively, a
decrease of $0.8 million, or 26%. This decrease can be attributed to reductions
in stock-based compensation expenses and consultant costs. The decrease in
stock-based compensation expense is primarily due to large prior period stock
option grants that contain performance conditions and were, and continue to be,
accounted for using the accelerated attribution method.
* 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 three and six months ended October 31,
2012 and 2011. 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 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 its Personalized Oncology Solutions business.
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.
Contact: Susan Foreman 410-369-0365 sforeman@championsoncology.com
Champions Oncology, Inc.
(Dollars in thousands except per share amounts)
Reconciliation of GAAP to Non-GAAP Net Loss
Three Months Six Months
Ended October 31, Ended October 31,
2012 2011 2012 2011
Net loss - GAAP ($1,974) ($2,349) ($3,297) ($4,387)
Less: 624 855 1,364 1,868
Stock-based compensation
Net loss - non-GAAP ($1,350) ($1,494) ($1,933) ($2,519)
Reconciliation of GAAP to Non-GAAP Earnings Per Share (EPS)
Three Months Six Months
Ended October 31, Ended October 31,
2012 2011 2012 2011
EPS - GAAP ($0.04) ($0.05) ($0.07) ($0.09)
Less: 0.01 0.02 0.03 0.04
Effect of stock-based compensation on EPS
EPS - non-GAAP ($0.03) ($0.03) ($0.04) ($0.05)
Condensed Consolidated Statements of Operations (Unaudited)
Three Months Six Months
Ended October 31, Ended October 31,
2012 2011 2012 2011
POS operating revenue $459 $590 $1,377 $1,188
TOS operating revenue 999 1,151 2,187 2,184
Total operating revenue $1,458 $1,741 $3,564 $3,372
Cost of POS 582 461 1,354 945
Cost of TOS 475 620 1,174 1,104
Research and development 436 1,008 823 1,616
Sales and marketing 680 651 1,389 1,262
General and administrative 1,201 1,470 2,340 3,130
Loss from Operations ($1,916) ($2,469) ($3,516) ($4,685)
Other (Loss) Income (57) 120 223 298
Net Loss before income tax expense ($1,973) ($2,349) ($3,293) ($4,387)
Income taxes 1 - 4 -
Net Loss ($1,974) ($2,349) ($3,297) ($4,387)
Earnings per share- basic and diluted ($0.04) ($0.05) ($0.07) ($0.09)
Weighted average shares outstanding- basic and diluted 47,079,000 46,790,000 47,073,000 46,606,000
Condensed Consolidated Balance Sheets
Balance as of
October 31, 2012 April 30, 2012
(unaudited)
Cash and cash equivalents $2,161 $4,716
Accounts receivable 627 584
Other current assets 95 205
Total current assets 2,883 5,505
Restricted cash 188 188
Property and equipment, net 485 560
Goodwill 669 669
Total assets $4,225 $6,922
Accounts payable and accrued liabilities $1,723 $2,301
Deferred revenue 1,205 1,185
Total current liabilities 2,928 3,486
Warrant liability 322 555
Redeemable common stock 8,159 8,159
Stockholders' deficit (7,184) (5,278)
Total liabilities, redeemable common stock and $4,225 $6,922
stockholders' deficit
Condensed Consolidated Statements of Cash Flows (Unaudited)
Six Months Ended October 31,
2012 2011
Cash flows from operating activities:
Net Loss ($3,297) ($4,387)
Adjustments to reconcile net cash used in operations:
Stock-based compensation expense 1,364 1,868
Depreciation expense 103 49
Change in fair value of warrant liability (233) (288)
Changes in operating assets and liabilities (491) (533)
Net cash used in operating activities (2,554) (3,291)
Cash flows from investing activities:
Purchases of property and equipment (28) (160)
Net cash used in investing activities: (28) (160)
Cash flows from financing activities:
Proceeds from exercise of options and warrants - 98
Net cash provided by financing activities: - 98
Exchange rate effect on cash and cash equivalents 27 15
Decrease in cash and cash equivalents (2,555) (3,338)
Cash and cash equivalents, beginning of period 4,716 10,457
Cash and cash equivalents, end of period $2,161 $7,119
SOURCE Champions Oncology, Inc.
www.prnewswire.com
Copyright (C) 2012 PR Newswire. All rights reserved
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KEYWORD: New Jersey
INDUSTRY KEYWORD: HEA
MTC
BIO
OTC
SUBJECT CODE: ERN
AI
