CSBR - Earnings call transcript Q3 2025 | Champions Oncology, Inc.

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Operator

Greetings. Welcome to the Champions Oncology Third Quarter Fiscal Year 2025 Earnings Call. [Operator Instructions] Please note, this conference is being recorded. I will now turn the conference over to your host, Ronnie Morris, Chief Executive Officer.

You may begin.

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

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

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

QX million Oncology, underscored and a inaugural by $XX closure quarter successful of our of revenue marked for the data transformative our Champions deal. record

year, our our which profitability. bank multiomic that turn our the core to precisely dedicated characterized become the its has have industry-leading which by in cost ourselves PDX have the Our Throughout in have remains efficiency scalability, been driven business strengthening services increased and pharmacology data, management resulting and quality, processes, biopharma foundation improved to we and industry. at the for the refining led broadly and studies used teams by enhanced forefront,

capital-raising sector, maintain in we potential for we improvement look to the outlook remains customers rebound for biotech volatility. a our mild cautiously As ahead, industry. environment the the industry to their environment a slight tight, R&D in a performance recovery optimistic expand in Despite beginning with sector, the leading budgets and

for growth. promising opportunities suggests trend overall long-term the However,

to pharmaceutical invaluable their models for of and has characterization, expanding unique enhancing Champions always tumor companies drug for we our our insights consistently been bank, differentiator significant offering collection PDX A development. serves and By biotech multiomic data access a for with partners, as data. This have vital set data both drug developed who potential for gain resource discovery model-specific pharma and development. our a substantial robust set

for demand from depth. deeper of breadth the biological notably increased in has which both the can data, our rise AI, data extract the and insights set With

comprehensive data our actively data. -- most existing data biological a ways we extract set ultimately from unique strategic workflows, the and set how models. used This are discovery data the Recognizing deep management. this vision, this bank to data bridge industry Such prospective ML-mediated as biopharmaceutical transforming recently from data in value closed relevant we acquiring existing our data sets also omic mission as from tumor expansion data greater clinically our to the shift, discovery multiomic licensed set continued exploring using aims while of for deal and create set approaches aligns of a population. pipeline target exemplifies to world's gaps AI well biomarker where with tumor our The our

but to this sets Over value sets the discovery. past data sector data depth. shifting classical set, worked have from untapped few diligently data this The immense platform, insights data years, oncology in pioneering of offer away lack enhance is the use we recognizing that the of multiomic broad now type within biopharmaceutical deep

generating positioned data multiomic deepest evolving We well clinically the build significant this set. are the to to world's relevant enthusiasm in lead initiative and our landscape, for take traction

our secure In that important on we position the not in yet excited while additional the impact are to other these hope with clarity quarters, the about our strategy will validation data premature customers remains on forecast deals to occur. its they engage pipeline, caution I deals, However, potential of size average the their frequency must that are opportunity revenue with a Consequently, and our to to we to results number overall contribution line. questions. our will project or we build continue the of which it or initial bottom to provide coming

Regarding using about optimistic have proprietary the Corellia, and targets are data. drug compounds developed owned we highly we our our subsidiary, wholly development

our actively challenging weighing to environment, with is results. engaged on carefully team Despite we our line the bolster and to in hopeful advisers the Our partnered bottom funding raising discussions remain company we about raise have capital the efforts, both experienced impact and the our outlook. for bankers capital while

QX highlighted In summary, quarter as call, us. for groundbreaking during this was a

on although is a We faced evolve are of potential believe we to our our transformative that And excited strategic first Champions. we long-term vision, of validation core an business. The deal data challenges, successful our for a growth. business data asset data poised we of completion signifying path about our the towards represents initial some are into

Miller hand of Now to David review results. will more our for the call detailed over a financial I

David Miller

Thanks, Ronnie.

results Monday, full XX. will on SEC be Our filed with Form March the XX-Q by

operations a to quarter income of As Ronnie EBITDA $XX.X adjusted million quarter service traction of early for contribution depreciation. $XX ago the basis, loss a On in platform. the was $X.X our data a stock-based to and compensation record and million hitting Research in our period, prior noncash the $X.X related $XXX,XXX highlighted, third surpassing from This we the $XX million, total compared million GAAP revenue was included had expenses year. new record-breaking our in with compared to million revenue was and reinforcing $X.X revenue year high. million a

adjusted was prior EBITDA to compared of adjusted loss a in record year. items, an $X.X million million $X.X these the Excluding

[indiscernible] third lab compared Total $X.X lab of a year, outsourced expense, was Turning was to services. XX%. $X.X cash-based decrease and results. The of salary cost the decrease due to in sales focus costs our million our quarter other last million to and primarily

the for was margin by data quarter revenue. high-margin XX%, the listed gross Our

period to compared last in Our to XX% improved, margins year. research XX% service same the also increasing

quarters, of in sales, long-term Our research fluctuate XX% service margins expansion the exceeding cost volatility expected long-term as revenue next we grows. X will over revenue and but anticipate with margin some

reflected expenses disciplined operating to cost Our management. our commitment

as business. optimize million to or Our spending $X.X while in core investments XX% key we R&D expense maintaining declined our $XXX,XXX

and expenses to marketing $XXX,XXX million, remained reductions $X.X our Our in at declined expense expense. million, G&A sales salary $X.X due to primarily stable and

$XX X%. conversion revenue million along increase Total which or a compared quarters costs. to million compared our margin was us was XX%. efficiencies through decrease of was sales gross the $XX million, XX% Summarizing $XXX,XXX from quarters, compared of an to our implemented, year, the the for $XX of last X maintain million high-margin coming XX% revenue, year-to-date improvement operational on results $XX.X our to Total enables with improve XXXX, revenue and period of cost data same the first total to X with in

result to XXXX. quarters adjusted XXXX. And compared million R&D of primarily expenses total X last X January approximately ended adjusted EBITDA Research is year, fiscal service of from were margins compared $X.X the months million for were XX, expense. operating $X.X loss through XX% down $X.X of in to to XX% million reductions The compared

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

by $XXX,XXX, the operational increase operating activities $XXX,XXX activities investment offset A was For in cash an in was by accounts in cash from net results, $XXX,XXX. generated used quarter, receivable. an quarterly approximately and was in improvement cash primarily increase

coming our cash quarters in on improve new progress condition revenue is balance increase data our sheet and poised and to is Our the continue operational as we results stream. solid, our long-term to

of quarter agreement. the successful record-breaking our first and a financial was milestone To with licensing data summarize, execution QX performance

revenue, research confident short-term volatility growth While in we in anticipate trajectory. remain service long-term we our

XX% We driving enhancing full reaffirmed and have to to expanding profitability growth our revenue of business, guidance value. focus shareholder our year XX% and on continue data

the to updating forward you now open We look progress in on call our during year-end to call earnings Q&A. July. We'll our

Operator

first with [Operator comes Craig-Hallum. The Instructions] Matt from question Hewitt

Unknown Analyst

This is calling ] Hewitt. [ Matt on Tal for

know don't I I if this. So missed

the deal, how bit, a it's there could you out there in You the And any regarding pipeline? of other guys constructed? licensing like please but kind cut opportunities are for little indicate

Ronnie Morris

Yes.

the for it a a we So the onetime of in that coming pipeline, discuss partners fee. actively the multiple of are data. and portion from deal next licensing over continue talking industry pharma the data, hope that's to our that to to biotech of power the and and was quarters. signed customers something terms the And we we about value our And was and

Unknown Analyst

budget few customers tariffs, those? see we've your with about then the on Okay. And you conversations regarding any given impact in past seen the uncertainty do cuts, weeks

Ronnie Morris

Yes. I as with us. necessarily tariffs it's impacted there. out carefully, environment companies. we But tighter know many -- many, a based we be themselves reputation I work extent, have that if And a watch don't our to certain certainly, the well as superior to it something continues think, on

I think a sector. remains tight environment, little shielded biotech out in it's bit but the especially it from the environment still there, us a

regards be ago see I still strong years to know and don't would effect it. too And in specific strong those sector had But to certainly, biotech effects. a as with seen tariffs could early we think if as so of and like as couple have the had I we the it's not as general, any it

Unknown Analyst

Okay.

then biotech it the the I'm would implementation of Or these translating there? that the is you're customers how weakness thinking? demand not from seeing studies I the to as early in sector, So with take that is directly as -- and direct

Ronnie Morris

certainly an think had I it effect.

done place, we've more a as with well as sure side, the our both our we're years, more on we've years, operational weather larger be some are base and many on as about in trying -- to more over done -- focusing talked lot have making scalable. and we customer and we're efficient to think much I the of careful processes biopharmas last X.X that on just the

it a as there, well. challenging attacked from we've think we've an well both I acquisition think as environment environment tough I that, it still handling Having been a is the out expense perspective. So but said customer

Unknown Analyst

this have in coming that a -- up Have demand, hope you like specifically year customer in in be you anything that -- seen biotech? turnaround maybe there gives you starting seen will

Ronnie Morris

that specific. it's think I sector

in biotech. still of I of oncology. and to targeted There types certainly pockets definitely therapies exciting. lot of certain investment of the think still that investment a pharma be are certainly continue in lot there's that a There's

still I say, would of than think X.X it still I a better So there's years ago. lot think certainly it's And while definitely about, challenging a time, slightly mildly I let's it's was say activity.

there the to where couple saw it's it we don't So all and of think ago wanted silver gotten just linings, are that years a to. to I where get place some back we

Operator

question GeoInvesting. Instructions] Maj with comes The next [Operator Sabin from

Maj Soueidan

GeoInvesting. and from story, way, company by That's the saw this we new really got the intriguing. for I whole into it is Relatively started time, really long but Maj a they to company recently. although thing And the Soueidan, covering very data the much

So now. X right I questions have

what the for being you give you And Can regarding that? how as me, does me that's the I structure answer parent it, it you -- what through forgive raise my are that? mechanisms too, of that question mean come company's the an that for capital terms The you you're to should So question. are that then color subsidiary to think investor, kind about looking around some -- my company? at next with raising So have of money And subsidiary. talked subsidiaries for for some first from pause company? about and back interest I'll for that capital capital-raising in do

Ronnie Morris

Yes.

have data, and when some kind of we data, that novel one do. One of we the data decided of response of some a see that against kind of develop the we the So were years we find a just we what set we targets was great that be that had more that's different decided to would on start at. biological focus drugs we this looking deep a And And the we we like couple and value if we could lot profitable had data. to become wanted a a others data of our these couple raw out felt data, little our to we of ago, to targets. and a really -- vectors and novel of was data, place had lot and

been lot we But the We're continue about Phase a where It's owned, Legally, spin-out, right company. it fund a to really we Champions. It's because been can't to wholly that excited it's it. only really team. of true now point Champions one to get Phase separated effort. requires we funding from got capital. trials, I, a because separate II wanted and separate the It's to have now a that

we're out capital. raising So there

there about investor this, of than will for. trying is Champions Our capital a of more investor It base, a base expectation we're asset. to the is It's that percentage It thinking discovery be we after businesses. Oncology different will And different drug of and Champions investor those raised investor what type base. raise a out we're will a of that's retain which an that's how have base. kind money

Maj Soueidan

Excellent.

raising So you equity out for aren't guys this. going there

now capital ownership fund this? CSBR's structure for just flow? outside isn't to of going kind affect our looking So capital to You're CSBR's help and this cash interest

Ronnie Morris

Correct. raise money the and flow It's going affect going going at we valuation hopefully, to to it's additive if a is an to value be asset to shareholder. cash the be not Champions only that, of attractive

Maj Soueidan

right. All Excellent. Excellent.

data very bit. think think, now, that it's is Janssen about kind an this side, talked exploring. you're are is little and the industry has doing I on a the or So lot I -- new of where others opportunity awesome, a of going I think what it

with has research. using even think cancer talked the administration I of kind to help about now

you -- this price I'm for kind and kind question assuming kind I here model. the the exploring a -- how maybe have model you're mean, is going of you're you But -- of know to new is of I I more

was this a I all like, So fee. licensing guess,

maybe move in might look as exploring you like your what maybe, want? this future. other are So I'd to this the that ways understand understand more through before my selling and customers question, and third it of like data you what

Ronnie Morris

is of of different exploring then We're data. about that sizes different And are And license come asset if have believe we flavors. and that -- data. ways customers Yes. aspects and think an customers in -- can couple It's there's so there our you you a we all valuable.

for You for can a license fee. it a out license fee,

milestones. or all different there's these some it license can type royalty for fee of levers. And You plus a out

And milestones than for discussions certain fees. interested royalties more license smaller interested obviously and so in the they're much potentially just of certainly we're to that pharma. larger some having giving paying are biotechs for more They

thing a they enough models. really everyone our of most data can value to at looking value use valuable. so us, is So the understand and our is to and so data why speak is Right bit customers our with now, important some of to little different. for the understand get different them play to this the to understand to and data We're

now. So of that's the kind and step that's in we're the first step right

Maj Soueidan

Okay.

get company, right, you'll the So company? of that you the large depending but on have anticipate would data, ranges you if works potentially like mix maybe component over this licensing time, also out, recurring a revenue type to a licensing, just of of the might into some biotech on

Ronnie Morris

Yes. looking wheel. at think have about we're And we're something reinventing models. and It's a we certainly not different lot, These the before. been done

structure how trying will and first so understand market it's we're which as deals. in possibilities the to is we're and deal, so have proof And business, a bear. concept, different others to go, we're anticipate, of going And couple And a the like learn, of about to we we other and right but our of of opportunities the I we're pipeline. we evaluate the be continue on. other we we're continue to customers, rest different will early what bit now, -- for to And trying little excited

Maj Soueidan

what And high to you a Okay. business. very gross bottom. margin, definitely this flows to regards is lot do, A the in right margin of high

depending right. Okay, licensing or on recurring. All

came go So move now call, movement data a to a your you of it about a of were data mentioned, kind inquiries customers. A on -- of -- you, it kind your on from model. this conference the from of and today customers right? of kind of lot inbound kind this asking you lot little last bit, mentioned There's licensing actually,

from? expand I how wondering there's guess, from interest new as most with do contract, of for opportunities base? X your What it. customer Was an or this own see That's that right? new existing do you So example, a -- to where base, coming this customer? see customer things. that the an I'm is your customer you is And opportunity

Ronnie Morris

Yes.

I it's both. think

remember, biotech between XXX You companies. we and of have to and with pharma work the XXX

biopharma the number large a with work we within So oncology. of companies

well So and of lot them. known with work we're a fairly we

there we not large a like them have audience. our so it's about -- data. yes, talking We're So certainly to out

business the out is customer our data But the our drugs. going in it's for give their and studies a the we to there noncustomer lot them largest we butter core where and both on them send to, of plan valuable insights and still to of part our for for our their be people about is do bread base business, we us Clearly, and compounds of base, people and why the the talking important. and value think

Maj Soueidan

Okay. And customer customer? keep assuming. see is this there's coming an talk maybe of back? here, the like option I'm one being a to and top reason Is -- Do little when done that -- a them buys know a a this to I with with has let's a for time about opportunity for come million data, there arrangement say with -- licensing a one I bit. back had you maybe want that. them understand to $X but you

Ronnie Morris

this between We We've little is, of to data data difference groups. and something -- seen continues other I think, always of as lot that a grow. and the see bit a us

So you data our lung cancer genomic was have a I'll went layer a an through we example, profile. patients we And a many and years have -- then transcriptomic of we ago profile. first give XXX

a we layers. other went to layer phosphoproteomics, and of we've Now -- proteomics added then and we then added and

so understanding in that, model. interaction the both that within we continue has deeper that of to responses and had and different So pathways clinic with PDX tumor of also the interactions the the layers the the add in all tumor that

our and bank enriching keep of of And beauty that's we the data. data. our kind So the

with before, much ton complicated become to now of can we and biology generated characterizing the refined because now as AI, advent understanding we sets keep the data. it was data be created deeper. deeper and tumors more the these with there's and there's AI, lot and the characterization, a advent more So it. more a and more with of of that But And get important, from just more these learned opportunities

more So to generate yes, customers. from our be is that continue data well And our resonating data to plan to with these seems sets.

Maj Soueidan

terms that companies Great. I competition be give out one leader said Okay. you're this. a you -- same you you seeing think wanted first embark to think you lot can of in a to like right where you an the in are me Great. there? seeing idea just really are And And do the ones kind of this now? thing? do compete you like against whole on more you Or of thing the

Ronnie Morris

Yes.

So have been selling time. I lot long think a for of data companies a

a where firsts time, not the of very, each companies I but patients who period at the for it tumor, a call, a patients, and thousands molecular of and the and with think on many we're very data going deep, are as data differently, I at long each with biological of most been of of each one would We're small longitudinal selling bit of have a very patient. interactions amount what doing deep with little understanding level. patient a really hundreds

from looking I new unique a on the and we standpoint, very of the tumor a a for and discovery I able targets, data of unearth So drug approach, right for with really time the of set think it's machine deeper type effect the think the some avail insights. understanding of AI a from because biology to be this and it the to capabilities learning have

the of think that's So approach our goal. right is this of a that's bit And a now. that little different time kind for right I

Maj Soueidan

companies? legacy back you of your going research your And are last Okay. helping you AI question, seeing do legacy to in business, your for business, kind own my

Ronnie Morris

Not so yet. much

yet. just seen not We right haven't that going core it's the business. to now, mean really of haven't It come. we doesn't kind It's effect -- impact of on the seen really that

Operator

proceed. The is [ please from ], next Gilmore Edward investor. question private Edward,

Unknown Attendee

a had Just quick questions. couple of

tumors? to a example, maybe identification data, potential evaluation you used with for a side of On clinical of for the and outside research, the and AI setting more be data things the of discovery see drug in do with

Ronnie Morris

in of of mean terms biomarker like approach? a You

Unknown Attendee

Yes.

Ronnie Morris

we've and been mean, kind tumors. the deep Yes, path. path path always of whatever most finding reason, A last The is over in from from biopharma of uses best the I biomarker a the that. that that kind just felt biomarker our drug. not lot right only of perspective. lot, for It's that know of of And I've discovery other that perspective the really we a And that always XX for there's interested X reasons right the a haven't a is have the they still for biomarkers but perspective was better felt in biomarker in for trial. they super data, for -- interest seen now. real for understanding population about understanding a that interesting talk go really these what one -- should patient much data I discovery a is a years The is super was

keen I -- think it's that's or to them specific the of to super that I narrowly finding in the of out restrict only the going on important the are sure drug. pick make successful, very they're patients for to work that figure going biomarker don't to kind out that kind just trial trial clinic to know that but is

yet, it's a I our force to use biomarkers. certainly be for a good don't of smart has certain driving much. look our to -- data So clinical But as -- data way been certainly as super super it people for the think could also use that, to

Unknown Attendee

be from from talked expect that's perspective, what are you more there's excited know you I come a I little then wonder and about going for could about -- to out that had AI a the And bit announced weeks heavy and a that. kind cancer that the of a give guys mentioned you Because on second tuned for put color of the -- if of upcoming accepted abstracts there. kind Okay. associates meeting stay investors, ago, number and that to your that? of you a and is question, for topic presentation couple release you research were We'll how there. press just

Ronnie Morris

Yes.

organization CRO, way of and an leader, We been of kind us. more have not see scientific much so always like partners but a our that's a that's the

it was do think lot we just cutting for and of I on thinking be doing to we innovative to us edge, to partners help that drugs pharma the is the to work clinic. in them best essays package chance give just be just develop show and we continue to R&D best with the that develop preclinical how best and to important the a about the going continuing the get the

So because the of -- continued we're that innovate. we to about excited number continue posters we it just shows

an read We to continue certain become available, to about R&D as And be And abstracts and extent. think to will those of you'll organization ourselves excited a certainly, them. it. able we're

Unknown Attendee

Okay.

sorry, And question. more one quick

the leading far how acquisition? that's the data have as internally there, as side, setup back. what's that team do customer go-to-market PDX do you a then like strategy Or I'll On now you drop and

Ronnie Morris

of not the I terms I'm understand what? question. sure In

Unknown Attendee

able license prospective to customers out how they how data, they have to biotech pharma if to communicating or find can company. be that of you're the about access terms In they're

how they're they that Just can... discovering

Ronnie Morris

terms data side. to that Yes, the a have In handle a -- have the side? we terms In side? separate data team separate of handles we data team of

the a a because but have crossover core a just customers. -- it's same also the there's team We lot handles of lot that of business, between

handling there's sales the data team, as strategy. the crossover lot team So between business that's well of development the the a regular as team

Operator

George The from is next Pareto Marema Ventures. with question

George Marema

the how of of out your question speaking, for it million data, of pie all on entire deal. How deal? they Kind I $X data? much X%? pie, a this slice license million did big $X roughly XXX%, data had total Is buy the of the this like represented a

Ronnie Morris

we don't Different early, have late. We about of talk for isn't people how That deals really data. announced. pay something different much on depending kind have that Yes. publicly people

that isn't publicly. we have spoken about something that So

George Marema

Okay. on for currently? you go-to-market and you licenses this? kind internally, how selling data do this dedicated have on Or your marketing salespeople And of exactly these are like

Ronnie Morris

Yes.

dedicated a have team. We

Newman. of the manager, Head a We general our in Matt sciences. brought have data We

couple a of a this development have people who We of business have experience lot area. in

we that's It's have a last a data. team talking out but team, there assembled. new year, our dedicated over the X So yes, a we team now months a to fairly have about

George Marema

few hear do the did And you in a far? I the have in that in pipeline couple here are call that so earlier XXXX

Ronnie Morris

can you out second. You that? repeat sorry, I'm cut a for

George Marema

deals I have hear licensing that are currently in Did deals? it on or that Yes. right data the X pipeline you X

Ronnie Morris

you we will have pipeline I deals that And continue mention that number -- large. in to to of pipeline. believe a of deals and what think some I'll heard the again, was we that talk the we the add just people. I didn't And are be

Some of the deals will be medium.

a the of and get Some to and them to people deals think continue is believer over. the our small. and goal use will make I And utilize be to data data more more

Operator

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

Ronnie Morris

Thank much. you very

mentioned, for look forward having fiscal Oncology. As quarter our Champions call mid-July. year-end to exciting an this is we We

So progress you to then, excited following look forward up and until the joining. Thank stay we're we that about and we're tuned, everybody. making, with for

Operator

your time. lines you today's for This you conference, this participation. your may and disconnect concludes Thank at

Champions Oncology (CSBR) 11 Mar 252025 Q3 Earnings call transcript