CSBR - Earnings call transcript Q3 2018 | Champions Oncology, Inc.

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Operator

Ladies and gentlemen, greetings and welcome to the Champions Oncology Third Quarter Fiscal Year 2018 Earnings Call. At this time, all participants are in a listen-only mode. A brief question-and-answer session will follow the formal presentation. [Operator Instructions] It is now my pleasure to introduce your host, Ronnie Morris. Thank you, you may begin.

Ronnie Morris

afternoon. Good

is us Chief call. for today you Officer. Miller, joining for our David me Financial our Thank Joining quarterly earnings

I call remind forward-looking will what is could begin, we those from Before make statements. in will differ you materially statements that and that today’s described actual results during I

discussed that to financial results XX-Q on to Oncology. financial XX-K. Form Additional measures and available earnings available may reconciliation is in call for factors release. another A information non-GAAP during differ measures is could This cause Champions of GAAP strong that be Form the in the our quarter was

continue We we’re laid This model. represents the excess our third margin, progress our and million. areas, key taking reporting in development company. of as consecutive advantage $X goals quarter out projections This for including is we’re the leverage several revenue business growing to of with an market our expanding we’ve demonstrate our stage and presence, the achieving the important in in

We’re growth on along continued and This fulfilling fiscal in into revenue XXXX, positive for greater profitability. that operational optimism is than optimism some consist our by remain our We growth giving of importantly factors. reaching driven costs, XX% most year controlling place year-over-year year. results, for key with catalyst commitment our growth confident next several

the opportunity. are budgets are First market to R&D advantage R&D expanding and we of of oncology – all, positioned well take

a We in cognizable unique bank tumors and and advantage bank of heavily believe marketplace. the why invested have the testing. the the give continue and to tumor available characterized we with companies for that is us will supporting Secondly, competitive unique well opportunity for strategically tumor selection

operational drive all excellence for business reputation in to our Thirdly, direction. continues

consultative things in spoken service but future deep that one we the are which opportunistic adds nearly core several other we is as growth not pride our have relationships. about excitement muted which we opportunities potential. result are rather a provider, in leader and about There take of which scientific that the Additionally, past revenue

with directed budgets those R&D therapies. oncology being of many are dollars mentioned, immuno-oncology As expanding towards

co-clinical signed to trials While just to-date, immuno-oncology responses in on offering interest patient several These expand Also effort invest trial. patient the PDX enrolled we’re tailoring IO improve of companies. in within the we models from – the the dollars product value calls, and and previous discussed enabling and expanding involved with and continuing our and as available the partnering in drug pharmaceutical by pharma studies – completed single and to clinical individual millions the clinical the trial. patients had provide not we from response models multiple to our

million our and approximately recognizing We have service revenue year-to-date booked opportunities. currently of works, discussion $XX while $X additional and co-clinical million

to continue model program. expand build We our

and our since interceptive first institution pharma and unique evolves using PDX then this to reminder, our a with network signed that of interest quarters As to types several tumor find program models academic companies that medical claim that. headed. It’s and AstraZeneca global We line before several and ago our of deal industry. and and profitability builds in PDX opportunities of unique leaders more where the non-GAAP we’re these with all they and the pharma top our in validate are we with types companies. pleased other indeed are direction specific that providers All

our Miller to year the enforced the revenue fiscal for months David and operational strong outlook nine call first the for growth results of I confidence will for year our in results. financial annual for reiterating financial over fiscal now Our XXXX, XXXX. we turn profitability

David Miller

Thanks, Ronnie.

increase This million, in third XX. driven an prior our quarter increase consecutive XX% was full revenue or $X over our ended primarily year, $X.X quarter million quarter quarterly Revenue for three XX.X% segment, year-over-year our on compared the Our of to By business in in the growth Form Sustained and a on XXXX, TOS results of is the million. business $X.X will XX-Q enabling in January in XX, by of SEC increase increase growth in the segment. filed million fiscal the third revenue. March months was for with the pipeline XX% revenue be revenue TOS a our excess before XXXX. was $X.X third of

reported the second to growth revenue As the year TOS return third quarter than segment to the the mentioned year-over-year second on expected TOS higher period. XX.X% for quarter. gross ago business quarter, in to XX.X% margin our XX% our in call, in rate the level was we compared

may which GAAP. with margins expenses are fluctuate in recognized Our the quarter-to-quarter, revenue accordance and manner given gross in

However, will become that fluctuations margin as time gross our over we continues less quarterly business and grow, expect fanatic. to

to efforts business decline quarter We third from higher component for months development three expected year, margin same for the also period segment of XXXX continued compared fiscal quarter fixed for TOS costs X.X% XXXX, for resources was realize lab period compared our an the facility. third we base same increase trend our growing compared the and the January of in last $XXX,XXX to This to XXXX, POS Revenue our our gross year. of to in Research last and new of million XX, year. quarter ended expense the in cost XX.X% sales savings period in decrease $X a $XXX,XXX operating XXXX third compared of what margins January against our cost IT as shift and to of XXXX recruiting as same leverage X.X%. And we Total months operating revenue was year. $XXX,XXX result Sales as the three $X sales. was the expand the same opportunity. quarter year, XX, reduction in XX, The was we in period expect last variable of of compared some as General last mainly fiscal was and for were the expenses months our expense cost last for to see we and same last X.X%. to period marketing gross business. X,XXX,XXX is POS third the result the to resources market is ended fees million a growing the capture of G&A in and $XXX,XXX increase the period expense million in of January same marketing $XXX,XXX we year. compared was The ended POS of division. of $X three XXXX million $X.X the in an to force increase in a primarily fiscal for administrative sales

you cost focus for fiscal $X.X the As comp last stock-based quarter operating non-cash $X.X majority operating based excluding depreciation cost expenses sales sales depreciation X.X% were compensation third an million Representing was to of excluding of period and same in increase compared results workflow. and a million we stock the our expenses an increase in XXXX combined increase modest on know, from in POS this year. by resulting increase. of generated and The

are increasing our such expenses digit growth cash-based total single a at percentage As rate. low

XXXX in digit or On We we expect low income our for – which far continue basis expectations single to our for outpace total to reported positive expenses non-GAAP a year we increase growth. cash cash the million operating fiscal from fiscal the similar $XXX,XXX quarter operations this of to approximately $X.X and in of operations results XXXX. loss favorably third basis reported we of $XXX,XXX a to on compares second quarter when a XXXX cash previous our from revenue

compared for Net of approximately was XXXX, $X.X for the $X.X XXXX months used of nine the first of fiscal improvement activities to in turn cash. Now cash an million. months nine fiscal let million million to first me $X operating

sheet. due the negatively approximately $X.X More in balance business. investment cash of along we million XXXX in normal end Resulting to from for of new rate our of accounts burn flow impacting to with had the our importantly, cash fixed $XXX,XXX the at course related the sheet of our on first assets a cash balance quarter lab other quarter

However, quarter, quarter guided increasing sequential has $X our in increased to rising in above balance as cash we million. and a last two this $XXX,XXX quarters $XXX,XXX position

Although cash remain our to position overtime. a fluctuate activities timing that cash hand a confident operating our our sufficient we increase to as on continuously primarily from is result quarter to quarter working can and of capital, fund of

put we that grow reminder, $X.X on. in of place a line that – million grown have up As can be we credit

that utilize the was working marked in that any operating the results it not, and capital normal credit third positive put have We of expenses to fluctuations course quarter short-term by plan. our in against arise [indiscernible] in financial the the protect our may for growth in place summary, line momentum of has continued old execution In business. of and

the We at XX% next July. growth full fiscal of at revenue towards continue the our as for year end, profitability. will And our of achieving sustained next XXXX to our year fiscal XXXX call quarterly quarter move we are is reiterating be end guidance least

for guidance are some with you your We now call the forward fiscal to We providing positive speaking open like then for initial XXXX. and questions. to looking

Operator

Instructions] go ahead. [Operator question first Please Our line of comes the Group. Joshua Thank from from Equity you. Horowitz

Joshua Horowitz

Hi.

compared appear Global it’s looking I year. Sorry, third How congrats. What to for that a It’s of year million year? $X lot Palm quarter, at last all cadence actually I’m would the difference? the it’s in accounts Cap first This this last quarter than have row. a a revenue be to for lumpiness look do question smoother from your – Small Fund. here. account I good

Ronnie Morris

Go Do you that David? want to ahead. take

David Miller

Sure.

of signed, the a is things, So of I terms that some signed, consistent we’ve of quarters level I just to than so in business prior more previously. externally it few say want in think just that business

In fall even we guess forward in as see role. we’re revenue much addition think a as as we out moving grow revenue as the even to we’re better that able grow want – – experts, to just and and and I exact that guide I operational plays efficiencies, as project think we activities And continues. as the will where will I generally lumpiness we

Joshua Horowitz

you. Thank

look And you this $X earn What quarter. company say, this per it earn So does the in at can $XX million at of million earnings in at what if could revenue do business, last $XX revenue? share? month a I million

Ronnie Morris

$X $X expectation if for would million results, of that but cash can we if what familiar we revenue So guided certainly quick would be million, a for at say at we in million we were I And similar we [indiscernible] $XX quarter. have also flow were can that,

Joshua Horowitz

I to that think I appreciate the the you now faster? are have the Yes, you forward stuff; so thought. What right capital it? will to could companies I to that – which leveraged from this here bottom need give point a do if capital with from you go you revenue you mean, growth to that’s common could the is get there grow. reiterated guide don’t I And the like that’s guidance think acquire? line. that line Could you of release, bottom XX% forward it’s highly general model, In we’d

David Miller

Yes.

opportunities are of capital the cash answer accelerate really those had have some don’t acquisition the there that approaches Oncology So can’t equity some currently lot to innovative if some that have we we of would capital had to have there we extra as there’s we if – is for programs of that opportunities And some lot and do we the both we that the because are we don’t want Champions do. a value. well and a

So that we things least a to don’t event at us really some a mentioned that have one to want perception want the grow, back have part we in before we would of – as order is which give to type do of And in go dilution. out us mismatch holding an there if the and you is value. don’t in raise our

But proceeds still your can little So grow growth. that question, lot just we are accelerate some to of are would use cash positive more certain to operating being we of if answer there a programs those flow to continuing potentially absolutely feel had and a capital. certain to continuing and do patient things our – that there we we some get things of

Joshua Horowitz

Okay, thank you.

Operator

Thank you.

the line Please ahead. [TriPoint of Global Equities]. Our Marchese from next Anthony question comes go

Anthony Marchese

compare valuation the afternoon. are out Yes, you how competitor hi, to My at? that last guys what understanding was months. bought that good does was and so, the what trading three your largest is in If

David Miller

They division ago. just not than a are oncology does is in Bio that Crown they little and oncology but us based what they bit do metabolic was different have Most a sense endocrine acquired of a approximately months also that So base. diseases. they seven that also

understanding assets So, the as oncology for was revenue. to the on basis at Having said understanding speaking was that my who for the a revenue assets. valued and acquisition over times acquisition, a involved the people the my I’m the valued it little primarily was not was metabolic with X that purely company and from well that,

Anthony Marchese

Okay.

about now? at revenue trading are twice you right So the

Ronnie Morris

Correct.

Anthony Marchese

you. Great. right. All Thank

Operator

comes question next Our Instructions] ahead. from [Operator the you. line [ph]. Thank Kemen go Please of Toni

Unidentified Analyst

AstraZeneca developing follow a you are right. And about as companies footstep. All how developing. their of getting I to as relationship part kind then relationship wanted second other that is mentioned you of bit that the that – is and that ask in little to

part of other can you companies of you that second that. advantages the color and it So are if the sort can give starting some is, give understand to around them

Ronnie Morris

Yes.

drugs. multiple patient has that So resistant us type competitors types drug our relationship have patients, of very our in on of in with and built them Neither of resistance been really population. who any need are a drugs of multiple – a have nor and a very They the pathways AstraZeneca those innovative AstraZeneca developed development way. have patients those right the on specific to patients. was ideas use idea understand and to They PDX lot order for that

AstraZeneca specific to The reason a the groups the reason a drug have really – of their development all primarily for world. we with because us patients. and So we chose AstraZeneca of around endeavors academic are in work we very lot with network is looking work

that pharmaceutical to want special special study to because study they they patient they PDX companies just hard to able But So we them exist. patient be population. centers the that for with working find Similarly can’t the population. it a world. there they have were And medical those patients oncologist, – other But don’t to do. to that able are academic the just want use model was around that something was to needs

So too And these build us to find of also models. us there. network come understanding unique our out they to them have having capabilities come have they to a help types and of

a is spent interesting interesting advantage have companies. this that’s perspective developing an And be seems pharmaceutical years it relationships. developing the the because unique we’ve we something our also from these that – So to to network, many

Unidentified Analyst

in of think something might a more you key being that year? that Do like in sort to of believe announce another you name this able terms contract with is Astra happen

Ronnie Morris

don’t to as to on always companies want announce say, tough contract It’s I have. we a that pharmaceutical as working the think what they’re us

be But So But to of their the to is pharma companies important important with for and more obviously and the us it’s important able us it’s us And have these things. be announce most able continue – possible. thing get develop business certainly the to cost work to R&D. to sponsor for these to models them

Unidentified Analyst

the that right want getting the companies you advancement? work type of you’re of So from regardless

Ronnie Morris

Correct.

Unidentified Analyst

nice Congratulations. It’s to see your company developing.

Ronnie Morris

Thanks.

Operator

this and the gentlemen, at no in I’d have Thank for turn you. we over Ladies further questions closing comments. back to queue management any floor like time. to

Ronnie Morris

would the like I to for joining we everybody think thank call. just

have forward our look Champions evening. opportunity to call. continue about be a good to at And next the We excited we Thanks and Oncology. quarterly

Operator

This gentlemen. for teleconference and conclude ladies you, Thank does the today.

have at participation this wonderful you and may disconnect a your You now lines your time. day. for Thank

Champions Oncology (CSBR) 15 Mar 182018 Q3 Earnings call transcript