On September 10, 2015 Champions Oncology, Inc. (CSBR), engaged in the development of advanced technology solutions and services to personalize the development and use of oncology drugs, reported its financial results for the first quarter ended July 31, 2015 (Filing, 8-K, Champions Oncology, SEP 10, 2015, View Source [SID:1234507451]).
First Quarter and Recent Business Highlights:
• Completed uplisting to NASDAQ Capital Market
• Filed patent applications to develop humanized mice to be used in immune-oncology
• Announced additions to management team
Joel Ackerman, Champions Oncology CEO, stated, "We continue to make progress in building the company. As the recognition of the value of patient derived xenografts grows, we are being presented with many opportunities to expand our platform into new areas. We are pursuing many of these opportunities in areas including immune oncology and clinical applications for our TOS customers."
Financial Results
For the first quarter of 2015, revenue was $2.8 million, as compared to $1.9 million for the three months ended July 31, 2014, an increase of $892,000 or 47.6%. Total operating expenses for the first quarter 2015 were $5.7 million, as compared to $5.6 million for the three months ended July 31, 2014, an increase of $78,000 or 1.4%.
For the first quarter of 2015, Champions reported a loss from operations of $2.9 million as compared to a loss from operations of $3.7 million for the three months ended July 31, 2014. Excluding stock-based compensation of $775,000 and $808,000 for the three months ended July 31, 2015 and 2014, Champions recognized a net loss of $2.1 million and $2.7 million respectively.
Operating Results
Personalized Oncology Solutions (POS):
POS revenue was $485,000 and $341,000 for the three months ended July 31, 2015 and 2014, respectively, an increase of $144,000 or 42.2%. Core revenue from its Champions TumorGraft technology platform decreased $16,000 or (4.9%). This decrease is due to a 21.6% decline in implant revenue offset by a 6.3% increase in panel revenue. Non-core revenue increased $160,000.
POS cost of sales was $661,000 and $757,000 for the three months ended July 31, 2015 and 2014, respectively, a decrease of $96,000 or (12.7%). For the three months ended July 31, 2015 and 2014, gross margins for POS were (36.3%) and (122%), respectively. The improvement in gross margin is attributed to the increase in higher margin, non-core revenue and cost reductions in the core business.
Translational Oncology Solutions (TOS):
TOS revenue was $2.3 million and $1.6 million for the three months ended July 31, 2015 and 2014, respectively, an increase of $700,000, or 48.8%. The increase is the result of increased bookings in prior quarters due to the expansion of the TOS sales team and the growth of the platform.
TOS cost of sales was $1.6 million and $965,000 for the three months ended July 31, 2015 and 2014, respectively, an increase of $647,000, or 67%. For the three months ended July 31, 2015 and 2014, gross margin for TOS was 31% and 38.6%, respectively.
Research and development expense was $1.1 million and $1.4 million for three months ended July 31, 2015 and 2014, respectively, a decrease of $300,000, or (22.7%). The decrease is due to lower one-time expenses in genomic characterization of our Champions TumorGraft Bank. Sales and marketing expense for both the three months ended July 31, 2015 and 2014 was $1 million. General and administrative expense for the three months July 31, 2015 and 2014 was $1.3 million and $1.46 million, respectively a decrease of $145,000, or (9.9%). The decline is mainly due to a decrease in stock based compensation expense of $105,000.
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