CSBR - Earnings call transcript Q2 2020 | Champions Oncology, Inc.

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Operator

Good day, ladies and gentlemen, and welcome to your Champions Oncology Second Quarter Fiscal Year 2020 Earnings Conference Call. All lines have been placed on a listen-only mode and the floor will be open for your questions and comments following the presentation. [Operator Instructions].

At this time, it is my pleasure to turn the floor over to your host for today Mr. Ronnie Morris. yours. is floor the Sir,

Ronnie Morris

Good afternoon. Champions CEO Ronnie Morris, of Oncology. I’m

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

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

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

Overall, and we compared $X to second basis. GAAP on we Revenue as million last of increased results year, and had almost a strong QX recorded million operating to an $X.X profitable quarter. both

remained products that and by we core pipeline to continue our encouraged services the Our bookings the for in development. strong and interest in services are be

nicely as models. our R&D continue In our efforts in we and well as TumorBank to addition, of expansion in progress our vivo

to cytometry Turning anticipated GCLP offering, our cytometry, flow quarters. of launch discussing clinical flow have regulatory been for we the several relatively services our new

As scientific our necessary we equipment mentioned, state-of-the-art infrastructure, aggressively building and we of services the including after approximately one selling last flow regulatory previously GLP began quarter. expertise, year

planning be are business. an larger conversion to are We these the tied a building studies our as cycle longer the confident to trial, we months. and than preclinical as clinical the are coming sales will the generally opportunities lead to Because that of impressive revenue we pipeline well of in sign expect are studies

well. excellence, of awareness acquired cytometry increased increase flow resulting services scientific in preclinical bookings of new our In and addition, of our suite as lab cytometry and flow because our in an significantly has comprehensive newly market operational GLP

We've bookings product and their our and had reminder has work. large been customers early Another assist our with as revenue. to which of exciting TumorBank initial has of launch ex-vivo pipeline studies platform, the leverages to which preclinical area phase, our our a support successful development a screening contributed

PhenoVista Our our complements platform comprehensive, allow our partnership develop to of platform This a offer to ex-vivo Champions approach development tumor set with internal recently us to development announced will differentiated, and has unique strategies multifaceted platform, ex-vivo solid imaging-based well. which numerous enabled services. unique a

encouraged In our a for for summation, core for it and was growing quarter services company, by demand remain we the products. and PDX the market solid the our opportunity new

the me for David call Now, highlights to let Miller financial the our over results. turn of

David Miller

Ronnie. Thanks,

XX-Q quarter, SEC Form had filed levels later anticipated our as a the well QX our jump revenue We on be results will with results. off full as profitable today. successful Our realizing achieving the in

million Second XX%. increase increased $X.X quarter to period, $X.X to of revenue compared year-ago of the an a in million total

to we recognized comp and compared stock-based $XXX,XXX comp we Excluding from depreciation, of stock-based operations depreciation, operations and from $XXX,XXX year-ago $XXX,XXX quarter. income for income in of the the income of Including period. recognized

to the and focus costs depreciation. comp excluding going I’m stock on

sales increasing second and period to in of the The line with or continued year, was $XXX,XXX for XX% the process. compared for the margin studies with of in same gross Our and XX%. last is expansion quarter increase cost revenue XX% uptick

studies. vivo compared us R&D $X.X was investment to the expense to provide million the models. complex We capabilities and along growing our continued million expanding to design increasingly tools our larger period. year-ago of allows and with in-vivo This pharma $X.X the R&D to in increased TumorBank more investment in run continue our

$XXX,XXX year-ago two was marketing in to increase The and $XXX,XXX factors. Sales period. expense contributing equally was to mainly compared the due

as into existing lines. to expanding sales as geographies territories force our new We and are strategically into deeper well growing penetrate product

of by the allocating quarter discussed commissions the course methodology for first our costs accruing year. call, adjusted Additionally, our on we over as those

While in in seen prior increased, the years. second the half second year-over-year this should of results the fiscal quarterly mitigate treatment we've spike it quarter sequential

$XXX,XXX G&A notably comp $X.X quarter compared $X.X our were for and of in million last depreciation for Our fiscal same expenses and was approximately increase or compared total, the the excluding mostly of year-ago quarter $XXX,XXX expense to costs flat stock-based period period. to In year, an second XX%. the the XXXX million

sales XXXX more quarter in leverage of we increase with majority of believe was and the aligned for half this business long-term our in for expense our fiscal revenue result The the our model. expenses are of cost generally and Overall, growth. first operating exists our the of

grew almost expenses while quarter-over-quarter mostly flat, by Our $X million. were revenue sequential

grow. are to we second QX, while we'll as see are cost quarter in will continue studies models. anticipate levels. mostly running there Overall, advanced increase revenues to and The our we be an believe in do -- of as expensive sales currently operating doing we however, our we ahead Looking margins more certainly increase percentage mouse fluctuations, over will be positive

we to the the year. $X.X million cash quarter, cash. sheet, than last turning balance higher the had the $XXX,XXX end of period approximately At second Now on same of

operating With cash confidence we For our cash hand on fund that the revenue our growth $XXX,XXX. our quarter, from activities reiterate sufficient is operating generated was profitability, anticipated activities. net to and

uptick maintain an quarterly to Looking continue the can XXXX, ahead remainder see fiscal will profitability to of year in revenue. our we and

the expansion provided, year, our range full guidance in come revenue head expect XXXX. of we we will year as fiscal towards and end into the continued anticipate we lower For growth the revenue

call long-term quarter we core our and in forward our summation, financial look a strong in had In and confident new mid-March. our products. We second remain business prospects of we to next

call the open now will questions. to We

Operator

will We Instructions] [Operator Capital you. Craig-Hallum move Group. at Hewitt Matt first to Thank

Matthew Hewitt

thank questions. for taking Good our afternoon and you

and to there me, might year, lower on you you at as you're just Did -- looking I end towards sounds you the the that I think have range. end for touched think it far hear it XX% one the David for First as the growth now of like correctly? I XX%

David Miller

correctly. me heard You’ve

Matthew Hewitt

growth the flow cytometry back XX% to at so if maybe for the and are looking the XX% looking taken you’ve to really we business? opportunity XX%, the I potential a XX% the then base Okay. guess that out, at for did deal, And or XX% include

Ronnie Morris

Correct.

of So that the call the a of weren’t and in many, earnings if our early, times timing on discussed is part have – because of in July -- that this potentially. flow, our we it first and kicked I wide you there’s all in think lot range also, we've of the was of many we the terms revenue. had sure even But in a know, would all, timing that discussed on something

end. but able down to quarter in the want towards guide a to bit, of the so So, narrow we prospects long we but certainly a to there as little confident are it the quarter, we're business, can growth term, bit be really just little lower fluctuations

Matthew Hewitt

sense. Makes

then Okay. Thank for you. a Ronnie you. question And maybe

creates, Regarding opportunity you their that relationship that about PhenoVista that those color additional assays, may is the helpful. assays? intra-quarter, be announced you partnership more be Any color the bit running provide could little who a would

Ronnie Morris

PhenoVista Matt. ex-vivo really terms Sure, in in capabilities especially of assays. has world, the imaging strong Yes.

that's we an be that partnering experts really that area are So, felt beneficial. in with would They area. PhenoVista

TumorBank. the have We

XD/XD provide our they're able specialized solid a specification. We with of solid and tumors take assays and tumors, have lot imaging different to the

Champions. will our PhenoVista through perspective, from It work. come will work So, clients. doing be The be will that the

it some like some PhenoVista. be will will be with internally for doing We working work our the of partners ex-vivo of platform,

a going to because within service. our the work. allow it's doing complementary excited, So rapidly than platform ex-vivo internal expand is I plus be more internal to able but up we're this us work to Champions, platform to mean, build all also we're a

Matthew Hewitt

And great. one That's me then hop one the I'll maybe and in last queue. for back

Thank exited you were think where you I sit?. targeting by reps, of the XX. that sales year, as and end Last to far XX XX As quarter the does you.

David Miller

number but regions, force. looking we're looking our We're some still expanding still at business at different XX, development we're folks. the Yes, sales different some

in lot So, we're expand. expanding in, see the also a We both still interest current geographies. that but to in of we're deeper territories looking going

So, both horizon. are on the

Matthew Hewitt

Excellent. much. Thank you Great. very

David Miller

Welcome.

Operator

We'll go to next ROTH at Henry Scott Capital.

Scott Henry

good you Thank and afternoon.

questions. Just of couple a

to to can expenses seems harder the driven increases think COGS just QX versus QX you by you the be be looking remarks we the I least to guidance? revenue sequential on although side, Did higher should of the -- prepared understood in line. way at versus should in it, It I seasonal quarter we the pattern. for think quarter, but pattern QX predict, second QX mean I third the expected give from about to sequential kind be on some QX? there, color to

Scott Henry

All right.

we of QX will that QX anticipating little bit are little but QX overly studies to level. a expect predict. it's early that is at area that -- do -- know where and So, something that bit cost it's a are models there have some we large and similar, so do prepared in we I if that may is sales, QX off expectation, know that insight opposed revenue anticipate as more that it some so that to We an think -- I'm not spike we're something running QX least for. uptick we an expensive. we not sequential there be to of a of be too in

And so, it's advance. just giving a of a little warning bit in

Ronnie Morris

add, Scott. also me Let

that, our about we remain and good we sense a really bookings never we've have increased to bookings the have only add continue talked in general, -- revenue, Let talked from me about just very strong. bookings,

quarter-after-quarter, the where sense as continue on bookings have always and incrementally we're to well. revenue increased us of about, a good the timing issue money just the for we it’s So, our we've as spending talked be that studies

from of long-term us after going we've this they for to us the longer for linked them see just -- to it's for going with just in times take that harder it's exactly be So, discussed because March know endpoints. that to revenue more can after more say, to time, the oh many quarter us models quarter, recognize for of to larger because it's studies are that studies complete some quarter It's until some perspective, it's easier revenue exactly harder and growth. we to take longer to larger as are our exactly studies

perspective, more bookings, the increase the at which also and when revenues you work, We go as costs we believe in continue it's that that we means completion. So, recognize we we from only because remember, expenses will work. as recognize doing our starting do to we're up our

Scott Henry

about rate? excluding kind for should XX%, to kind for as think grain higher should might forward or you XX how scale. look we to And including XX, you you when increase the term at if going of color. organic Thank it see XX% business business flow we I we the Okay. PDX growth think cytometry, cytometry, we to about the mean, long flow that of reach

of how Just in it sense get organically trying run? of to long you a think the

Ronnie Morris

Yes.

XX% where start about I we've think to XX% that good probably business, could a our historically of and be purpose studies core seen the somewhere of that's this see our ex-vivo a really as question services around the -- PDX just we in somewhere of screening increased is to think a kick of ex-vivo in-vivo year it large services we what -- be where So, than more is bank. we'll around once lot in, core

So, investigation in-vivo studies more. as XXXs we let's within more people will will biomarkers, screening of that core will of hypotheses platform, ex-vivo models up there therefore bank. the they PDX redirect studies, well, anticipate of and do more larger studies, that more then do end PDX using be say, the more some as doing

to its So, XX% that stands on think we that continue core as are catalysts it actually We it PDX to that XX% services. down accelerate over we time. can grow now, think there some the that but in somewhere growth range own, just -- the as

Scott Henry

modeling Okay, in great. And up go versus to small then margins Gross questions. QX just QX. two seem

to fundamental bit, QX that Now, go expect obviously but there it would changes, a little is just down are normal little bounces kind any a that around you in of variation? or

David Miller

a into there's the numbers, lot terms of fluctuations and ties Ronnie mentioned and in what of some definitely variation, think just normal think expenses. revenue timing quarterly I of the it I of

be getting revenues of dependent That as to So, I I of will timing the on that that uptick am do not of or an is there margin, for there exact anticipating terms some at necessarily in well. put so anticipate it in these But QX, studies difficult gross going when XX%. in because the XX% I be say, it's to of wouldn't a decrease okay, number, complete. our much in we're

a So, QX. in be there similar we -- range will should for be

Scott Henry

bouncing just in? similarly we And in that shift G&A, be then Okay. around that or versus smaller dropdown factoring about that is any QX on there numbers is kind still are or of I QX, talking should there

Ronnie Morris

that level business of There's the think the -- a anticipated that for of caused nothing where I I we a mean, I I our lot specific last next as we’ve base [indiscernible] building now forward. we of up good some than we've in-group are that's year think now. decrease think growth. And preparing other seen go than spent level like

Scott Henry

Great. the taking Thank you questions. for

Operator

We Paul Knight Janney. will move next at to

Casey Woodring

give would Hi, the half much of guys. back the year This Can that Paul. increase for ballpark quarter? revenue ex-vivo Maybe contributed us is to now how actually a revenue Hello. and you estimate of Casey percentage with on this the in PhenoVista partnerships? on

Ronnie Morris

Yes.

Sorry about that.

the So revenue quarter that? Could question, our part And revenue. of the of don't of ex-vivo your this second I'm actual about remember XX% was you total sorry. I repeat

Casey Woodring

in of that partnership. you Do the year, half increasing back see PhenoVista the with that

Ronnie Morris

organoids which out platform, so the is We from surrounding is a of the hematologic doing our TumorBank our we PhenoVista, internal see doing of solid partnership of expect will other than XD part a on -- malignancies. effort we that more primarily sooner the because and do We our R&D with is with we've internal What happen that PhenoVista work do solid which cultures just been an [ph] of ex-vivo were revenue background ex-vivo So first ex-vivo rolled do coming our development. we we're some TumorBank. expect platform. of

know So from certainly quarter that certainly I see I could some don't revenue next ex-vivo it's this possible. quarter-after partnership. but

Casey Woodring

Was maybe Thank negotiations as it pushed goes signed as those going? were That's on out deal you. maybe you cytometry And flow XQ to to think color us last how this into or get quarter. Okay. good that potentially call then you give can some a know. expecting with I far are

Ronnie Morris

Yes. That is true.

had that negotiation. very have pipeline. in And on very actually already would there We working have signed. a deals deal we're strong of hopeful We we were still a a are that closely bunch

Again, It fairly soon able longer have robust So a soon. deals we're a still be announce be thought, that will happen going didn't deal to it's we pipeline. we cycle. hopeful still to the as that signed, we we as a but revenue even

theoretically about couple revenue to sign we're we couple going deal for months, of of recognize a a in even or year. that So a a weeks not probably

couple get first of and looking to certainly So signed. anxious the deals

discussions of from pharmaceutical have We visits company. site been biotech having lot a and and different

So we're the excited about opportunity.

Casey Woodring

Thank you. you, Great. Got guys.

Ronnie Morris

you. Thank

Operator

turn additional questions closing conference [Operator Instructions] Gentlemen, I I'll any have comments. back the other no holding. or for

Ronnie Morris

about earnings very where quarterly Well, in the much thank our you for joining we're going call. We're progress. excited

item We've us of core timing. a all a going going happen. are these I just all is the to for when not think a things is it's if have There we platform. overarching to the developed team about a opportunity, lot lot happen, they're good And interest. and of about great

earnings forward for look the you thank and you. you So to talking we quarterly next joining to in call. Thank us

Operator

participation. that gentlemen, We conference. and conclude for you Ladies you. Thank will today's your thank

may You disconnect a time great at have day. this and

Champions Oncology (CSBR) 16 Dec 192020 Q2 Earnings call transcript