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 year ended April 30, 2015.
Fourth Quarter and Recent Business Highlights:
- Quarterly revenue increased 32% over the same prior year period result
- Procured a quarterly record high of more than 140 implants
Joel Ackerman, Champions Oncology CEO, stated, "The end of fiscal 2015 is an opportune time to assess the accomplishments and challenges of the past year. While the Company experienced an anticipated slowdown in revenue growth in the earlier part of the year, the foundation for long term success and operational improvements continued to progress. The $14 million of capital raised during the year demonstrated continued investor confidence in the Company and provides the ability to execute our strategic vision."
Financial Results
For the fourth quarter of 2015, revenue was $3.2 million, as compared to $2.5 million for the three months ended April 30, 2014, an increase of 32%. For the twelve-month period ended April 30, 2015, revenue was $8.9 million, as compared to $11.6 million for the same period of the prior year, a decrease of 23%. Total operating expense for the fourth quarter 2015 was $5.7 million as compared to $4.8 million for the fourth quarter 2014. For the twelve months ended April 30, 2015, total operating expense was $22.1 million, as compared to $17.8 million for the twelve months ended April 30, 2014.
For the fourth quarter of 2015 and 2014, Champions reported a loss from operations of $2.4 million. Excluding stock-based compensation of $0.9 million and $0.8 million for the three months ended April 30, 2015 and 2014, Champions recognized a loss from operations of $1.5 million and $1.4 million respectively. For the twelve months ended April 30, 2015, Champions reported a loss from operations of $13.2 million as compared to a loss from operations of $6.3 million for the twelve months ended April 30, 2014. Excluding stock-based compensation of $3.2 million and $2.8 million for the twelve months ended April 30, 2015 and 2014, Champions recognized a loss from operations of $10.0 million and $3.5 million respectively.
Operating Results
The number of implants during the quarter was 143 consisting of 51 commercial implants and 92 implants from research partnerships and trials. Total implants increased 39% over the same period last year with a 149% increase in implants from research partnerships. The increase in research implants were the result of continued effort to expand our TumorBank by partnering with academic medical centers. These implants will further the Company's efforts to increase the scale of our platform.
POS revenue was $418,000 and $430,000 for the three months ended April 30, 2015 and 2014, respectively, a decrease of $12,000 or 3%. Core revenue from our TumorGraft technology platform decreased $35,000 or 9%. This decrease is due to the cessation of implant activities in our Singapore entity due to regulatory restrictions. Non-core POS revenue increased $24,000. POS revenue was $1.7 million and $2.3 million for the twelve months ended April 30, 2015 and 2014, respectively, a decrease of $0.6 million or 27%. The decrease is due to a reduction in the number of tests per panel resulting in a $300,000 decrease in panel revenue. Non-core revenue decreased $212,000.
POS cost of sales was $543,000 and $628,000 for the three months ended April 30, 2015 and 2014, respectively, a decrease of $85,000, or 14%. POS cost of sales was $2.73 million for both the twelve months ended April 30, 2015 and 2014. For the three months ended April 30, 2015 and 2014, gross margin for POS was negative 30% and negative 46%, respectively. For the twelve months ended April 30, 2015 and 2014, gross margin for POS was negative 64% and negative 21%, respectively. The decline in gross margin is attributed to the decrease in core POS revenue and a fixed cost component to the cost of sales. Non-core revenue, which has a lower cost of sale and higher margins, declined, contributing to lower overall margins in POS.
Translational Oncology Solutions (TOS):
TOS revenue was $2.8 million and $2.0 million for the three months ended April 30, 2015 and 2014, respectively, an increase of $0.8 million or 39%. TOS revenue was $7.2 million and $9.3 million for the twelve months ended April 30, 2015 and 2014, respectively, a decrease of $2.1 million, or 23%. The decline is largely due to a slower conversion of bookings to revenue.
TOS cost of sales was $1.7 million and $1.0 million for the three months ended April 30, 2015 and 2014, respectively, an increase of $0.7 million, or 74%. TOS cost of sales was $4.9 million and $3.5 million for the twelve months ended April 30, 2015 and 2014, respectively, an increase of $1.4 million, or 39%. For the three months ended April 30, 2015 and 2014, gross margin for TOS was 41% and 52%, respectively. Gross margin fluctuates from quarter to quarter generally due to the timing of revenue recognition. Gross margin for the quarter was below usual levels due to an increase in TOS studies whose revenue will be recognized upon study completion. For the twelve months ended April 30, 2015 and 2014, gross margin for TOS was 32% and 62%, respectively.
Research and development expense was $1.1 million and $663,000 for the three months ended April 30, 2015 and 2014, respectively. Research and development expense was $4.8 million and $2.3 million for the twelve months ended April 30, 2015 and 2014, respectively. The increase is largely due to investment in characterizing the TumorBank. Sales and marketing expense for the three months ended April 30, 2015 and 2014 was $943,000 and $1.0 million respectively. Sales and marketing expense for the twelve months ended April 30, 2015 and 2014 was $4.3 million and $3.2 million, respectively. The increase was the result of the expansion of the TOS sales force offset by reduced sales and marketing expense for POS. General and administrative expense for the three months ended April 30, 2015 and 2014 was $1.4 million and $1.5 million, respectively. General and administrative expense for the twelve months ended April 30, 2015 and 2014 was $5.3 million and $6.1 million, respectively.
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