On March 11, 2025 Champions Oncology, Inc. (Nasdaq: CSBR), a global preclinical and clinical research services provider that offers end-to-end oncology solutions, reported its financial results for its third quarter of fiscal 2025, ended January 31, 2025 (Filing, 3 mnth, DEC 31, Champions Oncology, 2024, MAR 11, 2025, View Source [SID1234651077]).
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Third Quarter and Recent Highlights:
•Total revenue increased 42% to $17.0 million
•Gross profit of $10.4 million; gross margin of 61%
•Net income of approximately $4.5 million
•Adjusted EBITDA of $5.2 million
•Signed first data licensing deal worth up to $8.0 million
•Hired Matt Newman, Executive Vice President and General Manager, to lead and expand the development of Champions’ data licensing platform
Year to Date Highlights:
•Total revenue increased 23% to $44.6 million
•Gross profit of $23.5 million; gross margin of 53%
•Net income of $6.5 million
•Adjusted EBITDA of $8.3 million
Ronnie Morris, CEO of Champions, commented, "Our third quarter was transformational, marked by our first major data licensing agreement – an important milestone toward monetizing our proprietary
Exhibit 99.1
data platform." Added Morris, "Despite ongoing funding constraints in the pharma and biotech sectors, we continue to drive strong performance in our core services business."
David Miller, CFO of Champions, added, "We delivered record breaking financial results this quarter, with revenue surpassing $17.0 million and adjusted EBITDA reaching $5.2 million. While we anticipate some fluctuations in quarterly revenue, our strategic cost realignment positions us for sustained long-term profitability."
Third Fiscal Quarter Financial Results
Total oncology revenue for the third quarter of fiscal 2025 was $17.0 million compared to $12.0 million for the same period last year, an increase of 42%. The increase stemmed from a 4% increase in our research services business and $4.5 million from data license revenue. Total costs and operating expenses for the third quarter of fiscal 2025 were $12.5 million compared to $14.6 million for the third quarter of fiscal 2024, a decrease of $2.1 million or 14.1%.
For the third quarter of fiscal 2025, Champions reported income from operations of $4.5 million, including $256,000 in stock-based compensation and $398,000 in depreciation and amortization expenses, compared to a loss from operations of $2.6 million, inclusive of $379,000 in stock-based compensation and $481,000 in depreciation and amortization expenses, in the third quarter of fiscal 2024. Adjusted EBITDA, which is defined as income from operations excluding stock-based compensation, depreciation and amortization expenses, was $5.2 million for the third quarter of fiscal 2025 compared to an adjusted EBITDA loss of $1.7 million in the third quarter of fiscal 2024.
Cost of oncology revenue was $6.6 million for the three-months ended January 31, 2025, a decrease of $1.2 million, or 15.7% compared to $7.8 million for the three-months ended January 31, 2024. The decrease in cost of oncology revenue was primarily from a decrease in compensation and lab supply costs due to our recent emphasis on improving efficiencies and reducing costs along with a reduction in outsourced lab services which fluctuate quarterly in the ordinary course of business. For the three-months ended January 31, 2025, total margin was 61%, with research services margin of 48% compared to 35% for the three-months ended January 31, 2024. The increase in revenue coupled with our cost reductions led to improved service margins.
Research and development expense for the three-months ended January 31, 2025 was $1.7 million, a decrease of $467,000 or 21.4%, compared to $2.2 million for the three-months ended January 31, 2024. The decrease was primarily due to reduced investment in our wholly owned subsidiary, Corellia, focused on target discovery. Sales and marketing expense for the three-months ended January 31, 2025 was $1.8 million, essentially flat with a nominal increase of $9,000, or 0.5%, compared to $1.8 million for the three-months ended January 31, 2024. General and administrative expense for the three-months ended January 31, 2025 was $2.4 million, a decrease of $366,000, or 13.2%, compared to $2.8 million for the three-months ended January 31, 2024. The decrease was primarily from a decline in compensation expense and non-cash items of stock-based compensation and depreciation and amortization.
Net cash provided by operating activities was approximately $918,000 for the three-months ended January 31, 2025 and was primarily due to net income for the quarter offset by an increase in accounts receivable. Net cash used in investing activities for the three-months ended January 31, 2025 was approximately $470,000 for lab and computer equipment. Net cash provided by financing activities for the three-months ended January 31, 2025 was nil resulting from proceeds from options exercise of approximately $38,000 offset by financing lease payments of approximately $38,000.