- Earnings call transcript Q2 2023

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Operator

Good day, ladies and gentlemen, and welcome to the Champions Oncology Second Quarter Fiscal Year 2023 Earnings Call. At this time, all participants have been placed on a listen-only mode and the floor will be opened for you questions and comments after the presentation. It is now my pleasure to turn the floor over to your host, Dr. Ronnie Morris. Sir, the floor is yours.

Ronnie Morris

afternoon. Good Morris, Oncology. Ronnie of CEO am Champions I

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

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

measures GAAP be XX-K. release. business our differ to discussed in with in measures our Overall, in Forms in information factors we on is available financial call effort. services that Additional the non-GAAP and during could A financial Form available is that record the had as our quarter progress of discovery earnings cause may well as another results to good reconciliation drug revenue XX-Q

economic monitor and we our to first time, effect current noticed business. continue the the have for an on environment We

quarter, During in prior compared to specifically and a noticed September slowdown this October, bookings in quarters. we

below bookings obtained While total the our previous those in quarter's remained quarter. they strong, were

late-stage to pipeline a it customer to when feel we statement delay general there and came in base. strong, QX, a work that from was proposed of our Our finalizing be continues

optimistic halfway to and QX are are bookings we track We back are on QX cautiously through levels. that

Lumin, product our superior is We growth have continue to data to times. our expanded even economic we are propel multifaceted our platform, software in confident and which our work analytics TumorBank, regards With our that data high-quality services will and these product. uncertain

asset of overall last envision data been than still slower on part our discussed has our our an as anticipated. I call, quarterly strategy. adoption Lumin As long-term platform We and

crossroads We and needed reduce some that more in opportune to either SaaS to we sales of increase software we our [indiscernible] regards time determined to with we both and investment. or costs our were to our invest heavily at and support marketing a However, platform.

we've pharmacology to decided Lumin investment working and the for multiple Given to are being. our the current platforms our the expand we time offerings, on economic environment, reduce

new are continue from users, to still to we of to effort, focus our small continue our progress. short-term make regards number improve base on learn good With the While active development user we drug and will signing be up product. the to a to

programs Our its discovery are progressing lead discovery stages. through therapeutic well

last selected lead the as Alloy partnership antibodies, discussed development As quarter, with a A reached binding recently characteristics. from drug milestone our and biophysical series and favorable series this a evaluated conjugate. candidate a promising specificity was of exhibiting lead with of completed antibody

start to preclinical shortly. testing We expect

collaboration therapeutic second the in platform. are progress molecule of from also lead six quarter, record from first many months. had we preclinical to programs Fannin is into expected revenue. testing In summary, our programs our Our the potential next the Both during

continue platform. expand We our to

and long-term economic will significant the progress to a the We optimistic prospects. target anticipate that our on growth environment into milestone. current preclinical marking our are reacting We are we discovery effort phase,

let financial me Miller detailed to call for the more turn of review David a results. Now over the

David Miller

Thanks, Ronnie.

SEC be XX-Q Our or full filed December results XX. with Form before the will on on

$XX.X and were $XXX,XXX. XX%. And results approximately operating income generated with of period, adjusted We financial to of the record quarter $X,XXX. increase in stock-based Our or good of we ago million revenue million an second excluding of $X.X compared EBITDA recognized compensation million $XX.X year depreciation,

XX% geared last margin an cost or compared such up $X.X The same for as second stock an quarter million was an as in economic versus as our for results, and sales $X.X for XX% million we climate, pressuring period $X.X of from limiting million on Focusing the services the quarter supply expenses to anticipated XX% our volume. last uptick study Due of and increase Gross was period, XX% primarily the expenses was XX%. compared the was compensation total while revenue increase in margin total comp year. do in gross depreciation, from current in our we to year, margins. to and excluding noncash increase experienced our year-ago cancellations, pharmacology we

R&D in decided we've mentioned, marketing we'll be to our provided $XXX,XXX Ronnie ago expense expense in increase increase guidance adding and reduce the is as margin in our million with total compared of platform. our alleviate Sales $X.XX the As target Lumin flat to some period, line relatively should quarters, of $X.X pressure. past million coming our the and in million was The investment, in to XX%. or $X.X spend year-ago million R&D approximately data ramping in indicated year investing $X.X period. was therapeutic we the an up to TumorBank which discovery compared the

upgrading Our growth. was at ago, we $X.X the due was G&A compared year XX% million The increase primarily $X.X for our expense support to compensation increase. infrastructure in a to quarter company a and IT as million invest expense to

XXXX of levels. the million built period stemming infrastructure higher debt conditions. due bad the our support as In the approximately primarily current sales million same increased second to cost fiscal for we total, $XX.X from economic $XX to quarter last XX% in allowance with in were expenses compared increase cash-based of we revenue year, $X.X or our Additionally, of an the to million increase

had from sheet, $XX.X cash. balance quarter the we of cash quarter. of increase prior million Now our turning an on $X.X of At to the the end million

and our equipment a financial due revenue record was operating a positive had new was hitting accounts $XXX,XXX investing in quarter, $X.X For Cash good of of to the primarily used million. $XX.X we to million, in net for activities summary, course from ordinary in due activities generated laboratories. payable the operating approximately In cash results purchases cash-based quarter, of an increase primarily business.

increase bookings we experienced in As in along an the cancellations. discussed, a with slowdown in quarter,

year. revenue the approximate fiscal are XX% revenue long-term While company's XX% to we're we're in the in for the impact the half Accordingly, the from in be excited that optimistic we our likely reaccelerate beginning questions. would the range, mid-March. in will for of this slowdown call total to the increase prospects. to cautiously bookings second will XXXX in progression of year, the We down bookings open expecting the and your to We now cancellations total revision, and provided range XX% and forward our look well year. to like We're about positioned call weather at the update next to overall growth

Operator

And [Operator with Thank is for Matt is you. first Ladies question Instructions] from live. Matt, open floor and Hewitt your Craig-Hallum. line now gentlemen, is the questions. coming the

Unidentified Participant

Jack for Hi. Matt. on is This

funding curious what and current where QX So your hearing for the customers? you're I'm season first some Thanks. spoke due weak of environment. reporting from just seeing biotech is a choppy headwinds following companies to question the

Ronnie Morris

Yes.

the of couple which conversations, So seeing to we a indicators. from a in QX we've months includes middle look SOWs. there's signing at think of of the robust or those interest was we're a What customers of SOW conversations, pipeline, been what is, of pipeline, still time pharma over our big we the a signings. seeing need and lot couple saw performance actual discussions, we a we're look -- scrutiny, lot last more at out seeing look But then there. longer we the the We key at different just of

back to track. we QX, in on be seem far so And

aspect year. -- continue there's and well of not to positioned still smaller there especially We aspect tightening there's getting funding of it's the unclear but worried belt, we funding. out of going where an out to are certainly maybe some some -- certainly or either the there of to if their biotechs So think are progress growth have things about how are the the an rest

us. effect seeing a that things where hard quantitate saw again. of up seem an couple months having we because So months it's and to But to where be we're definitely on couple it's a of we now then opening had

Unidentified Participant

Thank you. helpful. That’s

Operator

The with from next coming question Scott Capital. is ROTH Henry

Scott Henry

did you, of good a have Thank afternoon. and couple I questions.

bit later-stage that to be canceling? the cancellations, or who is work Any a you can work? color Are Is companies? talk you companies? regards provide First, can it Thanks. little biotech earlier-stage smaller helpful. these these larger Are with would about

Ronnie Morris

bit I everything. think Yes, little it's Scott, a of

but there smaller mixture some biotechs were a mid of prioritize. some I think we larger and biotechs, it's that certainly,

think I might reasons sometimes different. that be the

six everyone prioritization last, their -- that I scrutinizing say, been has think projects. I think months of over the

-- of some examples stuff. of stuff, some then other larger the that booked I cancel we biotechs think have some but we some

just so into So then And it's going but they need to they're that or can then that lack that short-term turn turned because of some revenue, where they right stuff. absolutely now results, they raise to cancel allocation of around doing some have for and use won't a stuff more short-term reprioritization, biotechs smaller other impact rebook money. there's what to the just of examples for funding do

the I it's across combination So board. think a

that and a place, prioritization. get And spend, value looking think we we that think we everyone about provide puts think little as think has I good that when I services squeezed think a provide, we in us well. the also at their bit gets I squeezed everyone been I when but the

Scott Henry

only Okay. Shifting in the mean, months guidance XX% there's XX%. six gears, to I revenue left the year. of

given range? looks well year going the can the And the comfortable and you you half you of of So Or end be middle that targeting between about mix range wider QX? are a its QX feel Do that that little as are through. one, you talk it?

Ronnie Morris

question, was I'm last What sorry. that Scott --

Scott Henry

Thank you. about talk you and if the just QX could well, As between QX. mix

Ronnie Morris

Sure.

it’s that a I for listen, we So comfortable range that range, reason. with that think feel

effect I the the have definitely our greater if much revenue and and the revenue. probably QX with on what than Certainly, expected on total weakness slowdown QX into in that year have going QX out and greater in of terms think most the that it stuff an the of QX it's as we've bookings turns the we the happened in the bookings usual to cancellations in of not to an projections, effect QX, book going is cancellations. us of now some what experienced to normal -- the for in back and as even stuff than year's to go

going revised we that's on that we expected, to what think our we projections. and shorter-term we're from perspective, So a hit take that why

feel we think able storm grow. us confident to be continue stuff to to couple a weather do over good last in continue I the is longer to put going that comfortable the and to pretty and that the of and all position done we have term, years

hiccup us. a economic weeks looks is come So was based from What normal pretty is on to there six certainly to it has right pace now for the environment. last think we where we're back much what seeing seven now,

So that fiscal is next good going a into sign year.

Scott Henry

Okay.

QX? So should stronger than would one that be expect QX I to assume

Ronnie Morris

yes. QX. Correct. QX to expect would I stronger Yes, be than

Scott Henry

you Are if how environment, target discovery to that business, preclinical? preclinical curious monetize a get the line what just discovery just out-license? to ever Okay. you noncore about you And target Just that you expenses. you business And completely why Or it as much seem well, category. final get I processing? time sense maybe I'm anticipate bullish kind of cutting of recovery trying the trying still guess do could through beyond and on question. there. the business the understand I pretty talk do that when expense is costs and to taking But then

Ronnie Morris

Yes.

the treatments we data. that drugs, of these set with again, very, the So PDX. a just thesis set patients not couple unique have characterization drug deep is back but our have patients, that But multiple against these going these data because of it's PDXs. all data all of very on and multiple treated It's of also that's we have to been all unique a the the thousand of have we a fact very

characterized So which remind very unique I'll that deep and a And and the level, on our proteomics, very our you rich do to set with it RNA phosphoproteomics, expression. discovery. gives us is really a DNA the bank including data

look really the treatments. were at these these we treatments, of effects So from what all

the database. was so, it could for that think to we us impetus very really unique take us this unique find gives And a and And target. data that

these we've able about excited molecule we're targets. been to develop so the targets. against We're So far that the excited about

So be getting. results the excited about to we continue we're

soon. very to are work do starting preclinical very, We now

more ex-vivo been work. it, the in-vivo plan only preclinical to we've confident, the models do a starting and the work the the not some the of out and but but that we of in-vitro, do lot a getting we the for so enough in investment doing is really And try so which now and also So that and molecule, out-licensing on go to then get work in on we're molecule stability efficacy efficacy really to have. plan PDX is includes and to find so on. home and or And

don't We the find currently ready plan. for and to get clinic clinic, partner. a plan the to that's the goal the take but then So current these them into is

Scott Henry

the you Okay. taking for questions. Great. Thank

Operator

have in the floor queue. Okay. We no management any turn for to closing remarks. Instructions] back currently I'd [Operator questions like to

Ronnie Morris

I Yes. services trajectory the everybody We are Champions, that to for you. for that the growth a that everybody. Thank update thank look just forward call. of lot our to us are we and be lot about want developed exciting world. We're exciting at biotech assays important to have of to joining continuing continuing and to a pharma excited

we and the good call. look thank our forward to Have on continuing So evening. update call, everybody a you joining to for next

Operator

you, ladies call. Thank This does gentlemen. conclude and today's conference

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

Champions Oncology (CSBR) 14 Dec 222023 Q2 Earnings call transcript