Earnings call transcript Q1 2024

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Operator

Greetings. Welcome to the Champions Oncology First Quarter Fiscal Year 2024 Earnings Call. At this time all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation. [Operator Instructions] Please note, this conference is being recorded.

the to turn host, now will conference your over Dr. I CEO of Morris, Champions Ronnie Oncology.

begin. may You

Ronnie Morris

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

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

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

is on Additional Form could available differ on that to and our factors information XX-K. results XX-Q Forms cause

measures that to financial be discussed is A in call non-GAAP reconciliation release. may during the GAAP available of measures financial the earnings

XXXX, I'll prepared excess our accomplishments results I update on we be recently will the start highlighted ago. company with environment, out by which we cancellations our from provided I an provided strategic pointing weeks led the that economic the call, challenges and company. comments for the just that as vision overall brief our of the year update today to year-end along historical fiscal in fiscal six norms. relatively On for also encountered as such longer-term well

extend we fiscal some Additionally, led put may pressure XXXX. issues to year on identified our that that results conversion revenue operating slower operational and into

are challenges As indicated, results. year's our those impacting current

made cautiously optimistic that progress However, I'm those we significant reversing have trends. towards

will We confident greater to lead improvement operational internal with changes our the and operations. restructuring have efficiencies necessary made that some key we're in in an hires

we're historical softening continued our were pressures easing. the have of cancellations studies the be and of last some seems the towards behavior, to bookings levels. cancel note, retreating grow, a that and quarterly a economic customer to of higher longer positive On resulting months, over propensity Externally, cycle impacting seeing couple in quicker and sales to

quarters. which will over coming we We expanding be to vivo and sales growth about our lead the anticipate revenue increased excited platform, ex continue to

quarter. In we've development hires our this business made services, key during clinical biomarker some

an to bookings. in increase lead an We have uptick in in generation addition seen clinical

services, increase from longer the the should the positive and but revenue time. pipeline work discussed over growth over that our has revenue are years, a the in developments As to contribute bookings clinical traditional cycle than in

to regard through discovery our stages exhibiting are promising therapeutic discovery drug programs two Corellia, development With our well subsidiary, the lead lead with progressing our programs wholly-owned results.

begun have these programs building therapeutic We around targets.

exciting in Our raise investors an platform many capital our we has support accelerate with identified and and actively other effort are to engaged to growth. targets,

as a path. improvements have poised In growth summary, us hold and a that a challenging the reputation being spurt. our and and was the for slowly on that comprehensive strong we team Despite will generally this continue period, targeted stellar is platform, expected. quarter's take anticipate performance bookings to put We next back robust

We longer over are confident we emerge profitability term. and with the revenue that strong will

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

David Miller

Thanks, Ronnie.

Our full today. SEC later with results on Form XX-Q the will be filed

first revenue from a quarter decline XXXX. quarter first of Our was the million, of $XX.X X%

a last the gradual our over year-end our course will in the with half of financial reiterated call Ronnie, first performance on improvement year encountered of highlighted challenges the As impact year. XXXX, by and occurring the

the $XXX,XXX. our basis, comp prior the stock and XXXX for of to noncash of $XXX,XXX loss compared expenses loss GAAP totaling a On Included $X.X in was from first million quarter year. of a in depreciation were million approximately operations the loss $X.X

for was quarter of the noncash EBITDA to these period. items, adjusted year in the our $X.X adjusted million compared Excluding loss $XXX,XXX ago

period to to services outsourced to $X.X primarily [ph] to million year the of cost in launch lab The in compared sales last quarter an results, an year, Turning was of was the our total focus costs. X%. last due our relative million and $X.X first cash-based increase same the increase increase

improvement margin for The was margin gross in increase accelerates anticipate few increase cost next for XX% cost we our same at as the last to XX% the slower our revenue but sales compared rate. over a Due the continue to the the sales will quarters, the year. revenue, much of for will quarter gradual our pressure year, of lower course while period on of

For the expense $X.X R&D to approximately year $X.X the million quarter, compared ago million period. was in

Our our R&D in discovery invested business between supporting drug our the our and split discovery was spend Approximately core is efforts investing million towards services platform. drug R&D $X.X during traditional our quarter.

a was quarter the for expense marketing million. flat and Sales $X.X

to compensation $X.X ago bad an in and to compared $X.X was $XXX,XXX. the the was debt in increase million period, credit a due million expense G&A expense year increase and Our small allowances. increase primarily of The loss

we cash, balance million the debt. with sheet and to cash turning quarter the no of $X Now ended on

cash accelerated with quarter, of $XXX,XXX used in $X.X plan. million for financing and lab operating customer part the deposits The activities the and in factors, investment deferred cash was balance. studies, additional our revenue reduced for cash as an our burn repurchase return in net a of equipment quarter $XXX,XXX For canceled on to stock due including activities loss was which multiple and our

and which results grow, revenue, would As are results cash XXXX. results remains mostly our position gradually project challenges our the second We the be cancellations leading first half increase year. indicators bookings, to that improved, decreased fiscal with continuing by and solid over our our higher summation, financial as of our the In our still operational impacted will in were faced quarter expected. of

are the However, environment effect, economic beginning corrections and and obstacles, with an confident with short-term with continued bookings to that our improving long-term despite made some experiencing, take we're we're in operational strength prospects positive. our

second look and in our the growth next slow mid-December our year revenue our We but a results. in forward We steady when we quarter update report progresses. as to profitability operational improvement results, including anticipate

will open We now call questions. for the

Operator

And from coming time Group. conducting question-and-answer Hewitt today the this Matt At you. your Instructions]. live. Thank Capital first we is be question a is line session from Craig-Hallum [Operator Matt, will

Matt Hewitt

are QX the from landscape. we've biotech Obviously, call, others that hearing, today, facing one difficult issues. now. from Good companies first it's just but right of heard There's environment just not funding and regarding we've your afternoon. you sorts guys pressures. all taking for Maybe Pharma a really on the Thank been questions. and you

What improving it sounds reprioritizing are cancellations It like far as that but of down, shifting a the, on them going driving Is that's gears is is and situation? you maybe exiting guess, there leg pipelines? one customers from be? function of function next it's coming something what's to something as these and your is else, of are hearing Or area focus a this concerned. else what kind an booking I to

Ronnie Morris

Yes.

I a it's -- Matt, a of the all it's think combination of think, above. I

concerns were the just a booked of those, say, more that things quarters were we earlier. that are last of driven couple by, primarily over be going from to I think that the the cancellations little And they would funded? think, had I budgetary I

the something think might might with that newer are of want then one decide that I the other. to ones that book and where the thing prioritize prioritization they they more they landscape a over

would cancellations kind I all decrease two there's would think because of But these last And general so a I have One months. anecdotes. say in very a are couple over of say seen the palpable many comments. that comments. I we two

the third So month just now month. months, one wasn't two it it's or

direction. moving we're in right So from those confident kind perspective, are of the that that

feeling. now say like opening up mood them fund is of like or and in I are the biotech's money And to the up things the The their thing second that feel terms we raise continue things would program. feeling more to for are opening

better like way feeling amount the ago always ago. there's not of the be available, we of than in say, certainly to couple just a So let's a influx it but money a and feel tremendous did, was much years terms we of year going

Matt Hewitt

it. Got

So of maybe a normalized more more capital. back to lull

Ronnie Morris

so. think I

Matt Hewitt

Okay. it. Got

Ronnie Morris

I think so, yeah.

Matt Hewitt

margin. the a question That's Okay. And helpful. super then regarding gross

point was Are Some at you any you bring studies? outsourcing increased guys to those in-house to could complete due of on decline of something others doing. year-on-year that to reduce that guys dependence in some the your these of services some theory are

Ronnie Morris

have because Yes. get done. good for studies on of now. work them. pretty the the gross same We goes would just that of on say mice to increase we're we mouse using some think we margins the studies, was a I the the could of of biggest more handle the repeating to costs delayed which and amount some And pressure

that I think quarters, margin think the next probably are pressures to the that So couple largest going next pressures I in I back gross of those certainly we're on around. the couple think turn of months,

Matt Hewitt

hop Got I'll it. And me then queue. maybe one last back in one from and the

were I biomarkers were commenting the hires some to think you able the get there. that of you key and on

a longer of Or increase I an should we be in time. bookings those and about seen -- of some bigger the than gen studies? You've they've of your your are know that Are got they just clinical studies? thinking How size improving. types historical lead lead

I'm larger, just right? those thinking theoretically, be So should

Ronnie Morris

study a for all validation different Yes. types working, successfully and to clinical it's you the certain study. of they'll sign And and because come these They likes a assay. way larger the assay see biomarkers, validate of biotech just you an then if in pharma or the the the assay primarily sizes, first then sign

So a dealing a with. larger you're assay it's it study really validated comes -- or and it's then

that they're all think sizes. different So I

efficiencies. it talked just think us perspective, to accomplished that. We've type to running regulatory And operations Remember, the years it had correct. and us get with right labs of about our took our took from operational how couple a of longer I get years many efficiently the we

excited well. word to about to second the us, team see. business business we're these get the can let that do why to increased service new And team work, line new services part line the out development do, get in preclinical we lead now spread we business, quality word is the this already out high-quality because a hires the out in the that's work clinical It's and the be we in us. that we which know development word spread a think The able in we also to could we're that go we're was do because for that go will to going high for relatively key people are which starting and as actually new services service and these

Matt Hewitt

Thank great. That's you.

Operator

[Operator Capital. you. Instructions] The David Baron David, question live. is Baron Thank from from coming line next your is

David Baron

are hiring question goals? know that it's results Champions goals affecting they And out you're Morris. or ask your management to hiring. your increasing? decreasing? which higher looking entry for a I your Are Are your fill Or hire. that to employees? more you positions you're seeking there more seasoned in afternoon, to looking is Good hiring about wanted level the level these are I

Ronnie Morris

Yes.

So couple we're have to of looking not -- hire, but hire. positions certainly have of we a a positions do looking we lot we aren't to

have we when available. have in I our I But team, few terms history, good We good well think a have certainly a that quality think we're, we say we I a fairly at -- team have mean good positioned fairly considering very this team. I very of positions of I mean we, a people. point,

not I'm but question terms changed. of don't hiring, I the think sure our in hiring So has

bookings. We the have expectation a certain for

We expectations have And meet operation, to ex a expectation organization biomarkers. the want outfitted the the for to certain certainly we and like like we scientific the do. the vivo work for have platform those and

that we'll that We need fill in to efficient be over to up, good year we able next built And that we team be have with or efficiently. we'll operationally to work We it a be two, to and expect continue quality. place. has need capacity because able excess team the

There's now. but right openings. So we're of have openings don't always hiring many that I same hired. We we've always think some the turnover, have know we I always that bit

David Baron

you. Thank

Operator

for you. the there hand to back remarks. now Thank closing would were to call questions from other time. the at this I no Morris like And Dr. lines

Ronnie Morris

for excited of quarterly some ex assay. that very call. we've Champions happening We're joining for assays out, vivo the very good We're have. excited our us about drug you of we that discovery new lot Thank Oncology. been the rolling things A our earnings at especially effort about

biopharma. the be that excited We that in our perform we clearly, And do. for continue biomarker about we to vivo work

good, doing all in we continue in think quality reputation work. have So excellent the marketplace I to high for areas, an

And success. I recipes are collaborative. continued inclined, the for scientifically think are We all those

to forward look we with Bye. next our you have And good thank you, So everybody, quarterly discussing those on and call. a afternoon.

Operator

today's conclude does This you. Thank conference.

You this your Thank at for your may time. you lines disconnect participation.

Champions Oncology (CSBR) 13 Sep 232024 Q1 Earnings call transcript