On December 17, 2018 Champions Oncology, Inc. (Nasdaq: CSBR), engaged in an end-to-end range of research and development technology solutions and services to improve the development and use of oncology drugs, reported its financial results for the second fiscal quarter ended October 31, 2018 (Press release, Champions Oncology, DEC 17, 2018, View Source [SID1234532113]).

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Second Quarter and Recent Business Highlights:

Record quarterly revenue of $6.7 million, an increase of 28.6% year-over-year

Reported income from operations of $514,000, excluding stock-based compensation and depreciation

Signed lease for new lab space for flow cytometry and ex-vivo product launches•
Reiterated forecast of at least 20% revenue growth in fiscal 2019 and sustained, quarterly operational profitability

Ronnie Morris, CEO of Champions, commented, "As we expected, our revenue growth continued in the second quarter with year-over-year growth above 28% and putting us on pace to achieve our previously stated guidance of at least 20% revenue growth for our fiscal year 2019."

Morris continued, "We are moving forward with plans to expand beyond our core PDX offering to include our ex-vivo platform and clinical flow cytometry services. We look to leverage our existing Pharma relationships, adding to our product line and offering a more robust suite of services."

David Miller, CFO of Champions added, "We are excited to hit another milestone of record quarterly revenue and reporting consecutive, profitable quarters. The anticipated launch of our new products will help continue our revenue growth as we look beyond fiscal year 2019."

Second Fiscal Quarter Financial Results

For the second quarter of fiscal 2019, revenue increased 28.6% to $6.7 million compared to $5.2 million for the second quarter of fiscal 2018. Total operating expenses for the second quarter of fiscal 2019 were $6.4 million compared to $5.3 million for the second quarter of fiscal 2018, an increase of $1.1 million or 21.7%.

Exhibit 99.1

For the second quarter of fiscal 2019, Champions reported income from operations of $275,000, including $88,000 in stock-based compensation and $151,000 in depreciation expenses, an improvement of $345,000 or 492.9% compared to the loss from operations of $70,000, inclusive of $148,000 in stock-based compensation and $90,000 depreciation expenses, in the second quarter of fiscal 2018. Excluding stock-based compensation and depreciation, Champions reported income from operations of $514,000 for the second quarter of fiscal 2019 compared to an income from operations, excluding stock-based compensation and depreciation, of $168,000 in the second quarter of fiscal 2018 an improvement of $346,000 or 206.0%.

Cost of oncology solutions was $3.5 million for the three months ended October 31, 2018, an increase of $798,000, or 30.1% compared to $2.7 million for the three months ended October 31, 2017. The increase in cost of sales was due to an increase in TOS studies and salary expense. For the three months ended October 31, 2018, gross margin was 48.4% compared to 49.0% for the three months ended October 31, 2017.

Research and development expense was $1.2 million for the three months ended October 31, 2018, an increase of $78,000, or 7.0%, compared to $1.1 million for the three months ended October 31, 2017. Sales and marketing expense for the three months ended October 31, 2018 was $740,000, an increase of $189,000, or 34.3%, compared to $551,000 for the three months ended October 31, 2017. The increase is mainly due to an increase in salary expenses as we expand our salesforce. General and administrative expense was $1.0 million for the three months ended October 31, 2018 compared to $954,000 for the three months ended October 31, 2017, an increase of $80,000 or 8.4%. The increase is mainly due to recruiting costs.

Net cash generated was $940,000 for the three months ended October 31, 2018 compared to $229,000 for the same period last year. The improvement in cash flow is primarily due to operational results.

The Company ended the quarter with $2.0 million of cash and reiterated its position that it does not need to raise capital to fund operations.

Year-to-Date Financial Results

For the first six months of fiscal 2019, revenue increased 26.2% to $12.9 million, as compared to $10.2 million for the first six months of fiscal 2018. For the first six months of fiscal 2019, total operating expenses increased 11.3% to $12.1 million, as compared to $10.9 million for the first six months of fiscal 2018.

For the first six months of fiscal 2019, Champions reported an income from operations of $757,000, which includes $171,000 in stock-based compensation and $269,000 in depreciation, an improvement of $1.4 million or 209.9%, compared to the loss from operations of $689,000, inclusive of $741,000 in stock-based compensation and $132,000 depreciation, for the first six months of fiscal 2018. Excluding stock-based compensation and depreciation, Champions reported operating income of $1.2 million for the first six months of fiscal 2019.

Net cash provided by operations was $400,000 for the first six months of fiscal 2019 compared to net cash used in operations of $1.7 million in 2018, an increase of $2.1 million or 123.8%. The increase in cash is primary the result of our revenue growth.

Exhibit 99.1

Cost of oncology solutions was $6.5 million for the first six months of fiscal 2019 compared to $5.3 million for the first six months of fiscal 2018, an increase of $1.2 million or 23.4%. The increase in cost of sales was due to an increase in TOS studies. Gross margin was 49.4% for the first six months of fiscal 2019 compared to 48.3% for the first six months of fiscal 2018. The increase in cost of sales was due to an increase in TOS studies. Gross margin varies based on timing differences between expense and revenue recognition.

Research and development expense was $2.3 million for the first six months of fiscal 2019 an increase of $49,000, or 2.2% compared to $2.2 million for the first six months of fiscal 2018. Sales and marketing expense for the first six months of fiscal 2019 was $1.3 million, an increase of $24,000, or 1.9% compared to $1.2 million for the first six months of fiscal 2018. The increase is mainly due to increase in salary expense. General and administrative expense was $2.1 million for the first six months of fiscal 2019, a decrease of $76,000 or (3.5%) compared to $2.2 million for the first six months of fiscal 2018. The decrease is primarily due to a reduction in stock-based compensation expense.

Conference Call Information:

The Company will host a conference call today at 4:30 p.m. EST (1:30 p.m. PST) to discuss its second quarter financial results. To participate in the call, please call 877-407-8035 (domestic) or 201-689-8035 (international) 10 minutes ahead of the call and give the verbal reference "Champions Oncology."

Full details of the Company’s financial results will be available Monday, December 17, 2018 in the Company’s Form 10-Q at www.championsoncology.com.

* Non-GAAP Financial Information

See the attached Reconciliation of GAAP net loss to Non-GAAP net income (loss) for an explanation of the amounts excluded to arrive at Non-GAAP net income (loss) and related Non-GAAP earnings (loss) per share amounts for the six months ended October 31, 2018 and 2017. Non-GAAP financial measures provide investors and management with supplemental measures of operating performance and trends that facilitate comparisons between periods before and after certain items that would not otherwise be apparent on a GAAP basis. Certain unusual or non-recurring items that management does not believe affect the Company’s basic operations do not meet the GAAP definition of unusual or non-recurring items. Non-GAAP net income (loss) and Non-GAAP earnings (loss) per share are not, and should not be viewed as a substitute for similar GAAP items. Champions’ defines Non-GAAP dilutive earnings (loss) per share amounts as Non-GAAP net earnings (loss) divided by the weighted average number of diluted shares outstanding. Champions’ definition of Non-GAAP net earnings (loss) and Non-GAAP diluted earnings (loss) per share may differ from similarly named measures used by others companies

On December 17, 2018 Selexis SA and Teneobio, Inc. reported that they have entered into a second services agreement to expand Teneobio’s oncology pipeline of Human Heavy-Chain Antibodies (UniAbs), a new class of multi-specific biologics (Press release, TeneoBio, DEC 17, 2018, View Source [SID1234532094]). Under the agreement, Teneobio will utilize Selexis’ proprietary SUREtechnology Platform to develop research cell banks (RCBs) for three additional preclinical candidates for the potential treatments of B-cell malignancies and prostate cancer. Selexis and Teneobio announced their first services agreement in June 2017 to develop RCBs for multi-specific UniAb candidates for multiple myeloma.

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"Selexis’ cell line development technology was very effective in the advancement of Teneobio’s initial bispecific therapeutic lead," said Yemi Onakunle, PhD, MBA, Selexis vice president, licensing and business development. "We’re excited to continue our work with the Teneobio team as it seeks to bring a new class of oncology biologics to patients. Our partners choose Selexis because we deliver stable and high-performing manufacturing cell lines, while reducing the time, effort and costs associated with their development. The expansion of this relationship with Teneobio is a testament to our expertise and the competitive edge we’re able to deliver to our partners."

Selexis’ modular SUREtechnology Platform facilitates the rapid, stable, and cost-effective production of virtually any recombinant protein and provides seamless integration of the biologics development continuum, spanning discovery to commercialization.

"Beyond TNB-383B, our lead anti-BCMAxCD3 bispecific for the treatment of multiple myeloma, Teneobio is rapidly advancing a pipeline of differentiated multispecific candidates in immuno-oncology. The productivity and effectiveness of our initial work with Selexis made it an easy decision to apply the company’s protein expression platform to additional Teneobio preclinical candidates," said Omid Vafa, PhD, MBA, chief business officer at Teneobio, Inc. "We look forward to continuing to work with Selexis as we bring our programs into the clinic."

On December 17, 2018 Daiichi Sankyo Company, Limited ("Daiichi Sankyo") and AnHeart Therapeutics Inc. ("AnHeart Therapeutics") reported they have entered into a worldwide exclusive license agreement ("Agreement") for DS-6051, Daiichi Sankyo’s selective ROS1/NTRK inhibitor, currently in phase 1 development in the United States and Japan (Press release, Daiichi Sankyo, DEC 17, 2018, View Source [SID1234532114]).

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Under the terms of the agreement, Daiichi Sankyo grants AnHeart Therapeutics worldwide exclusive rights for the development, manufacturing and commercialization of DS-6051. While Daiichi Sankyo and AnHeart Therapeutics will collaborate to continue two ongoing phase 1 studies, AnHeart Therapeutics will be responsible for further development of DS-6051 worldwide. Daiichi Sankyo will receive an upfront payment and is eligible for clinical, regulatory and sales milestone payments, as well as royalties on worldwide net sales of DS-6051. Financial terms of the agreement are not disclosed.

"We continue to look for innovative ways to maximize the potential of promising compounds in our oncology pipeline in order to deliver on our mission of transforming science into value for patients with cancer," said Antoine Yver, MD, MSc, Executive Vice President and Global Head, Oncology Research and Development, Daiichi Sankyo. "We are confident that AnHeart Theraeputics will use the resources necessary to deliver a fast-to-market strategy to potentially bring this novel ROS1/NTRK inhibitor to patients as quickly as possible."

"We thank Daiichi Sankyo for its trust in AnHeart Therapeutics and its continued support in further developing the DS-6051 asset worldwide. DS-6051 is currently being studied in two phase 1studies for cancers bearing ROS1 or NTRK fusion mutations, and is a leading asset in our pipeline," commented Junyuan Wang, PhD, Chief Executive Officer, AnHeart Therapeutics. "It is our priority to move DS-6051 through the global regulatory pathways with a fast-to-market approach. We will communicate with regulatory agencies to initiate multiple global phase 2 trials of DS-6051 immediately after the transfer of clinical development responsibilities is completed."

About DS-6051

DS-6051 is an oral, selective small molecule ROS1/NTRK inhibitor currently being evaluated in two phase 1 clinical studies in patients with solid tumors harboring either a ROS1 or NTRK fusion gene and neuroendocrine tumors in the U.S. and Japan. Preliminary safety and efficacy data of DS-6051 from the first part of the U.S.-based phase 1/1b study were presented at the 2018 American Society of Clinical Oncology (ASCO) (Free ASCO Whitepaper) Annual Meeting.1

On December 17, 2018 UroGen Pharma Ltd. (Nasdaq:URGN), a clinical-stage biopharmaceutical company developing treatments to address unmet needs in the field of urology, reported that it has initiated the rolling submission with the U.S. Food and Drug Administration (FDA) of the New Drug Application (NDA) for UGN-101 (mitomycin gel) for instillation as a treatment for patients with low-grade upper tract urothelial cancer (LG UTUC) (Press release, UroGen Pharma, DEC 17, 2018, View Source [SID1234532095]). The company expects to complete its NDA submission by mid-2019, with potential approval in 2019.

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"This is an important milestone in our mission to bring innovative, non-surgical treatment options to patients with urothelial cancers and potentially eliminate the need for repetitive surgical intervention and kidney removal," said Ron Bentsur, Chief Executive Officer of UroGen. "UGN-101 has the potential to be the first non-surgical therapy for LG UTUC, and the first drug ever approved in this indication. We are grateful to our UroGen team and clinical investigators who have worked diligently to advance this potentially paradigm-shifting program."

The NDA submission is supported by clinical data from the Phase 3 OLYMPUS clinical trial of UGN-101 for the non-surgical treatment of LG UTUC. Results from an interim analysis were presented at the American Urologic Association Annual Meeting in May 2018. UroGen plans to present topline data from the OLYMPUS study in January 2019.

The FDA previously granted Orphan Drug, Fast Track, and Breakthrough Therapy Designations to UGN-101 for the treatment of UTUC. If approved, UGN-101 would be the first drug approved for the non-surgical treatment of LG UTUC.

About UGN-101
UGN-101 (mitomycin gel) for instillation is an investigational drug formulation of mitomycin in Phase 3 development for the treatment of low-grade upper tract urothelial cancer (LG UTUC). Utilizing the RTGel technology platform, UroGen’s proprietary sustained release, hydrogel-based formulation, UGN-101 is designed to enable longer exposure of mitomycin to urinary tract tissue, thereby enabling the treatment of tumors by non-surgical means. UGN-101 is delivered to patients using standard ureteral catheters.

On December 17, 2018 C4X Discovery Holdings plc (AIM: C4XD), a pioneering drug discovery company, reported that it has entered into an exclusive target discovery partnership with Horizon Discovery Group plc ("Horizon", AIM: HZD), a global leader in the application of gene editing and gene modulation technologies (Press release, C4X Discovery, DEC 17, 2018, View Source [SID1234533248]). The partnership aims to validate novel synthetic lethal oncology targets that have been identified by Horizon’s cutting-edge CRISPR-Cas9 technology leading to the generation of potential new drugs for patients with limited effective treatments such as colorectal and lung cancer.

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C4XD aims to apply its proprietary 4D shape-based chemistry technology (Conformetrix) to discover drug candidates directed against these high value, novel, synthetic lethality targets and out-license them to clinical development partners. This discovery partnership bolsters C4XD’s oncology pipeline, a high priority therapeutic area for the company.

The therapeutic concept of harnessing synthetic lethality in cancer with tumour-specific mutations has been demonstrated with the recent approval of the poly(ADP-ribose) polymerase (PARP) inhibitors Lynparza Zejula and Rubraca. These drugs are effective in indications that are poorly served by immunotherapy drugs, such as checkpoint inhibitors, and have become an established treatment in ovarian cancer. They work by targeting a specific DNA repair pathway that cancer cells, with mutations such as BRCA, become over-reliant on. Inhibiting this critical DNA repair pathway causes the tumour cells to self-destruct, resulting in the terminology ‘synthetic lethality’. The pharmaceutical industry is now rushing to fill its clinical pipelines with investigational drugs, identified by empirical research, that might produce similar efficacy in cancers where PARP inhibitors are not effective.

However, recent advancements in the gene-editing tool, CRISPR-Cas9, has enabled systematic ‘functional genomic’ screening to identify novel synthetic lethal genes in cancer cells with specific mutations. Horizon has utilised its target discovery platform to conduct high quality CRISPR gene knock-out studies across multiple cancer cell lines, screening around ~3000 genes suitable as the basis for small molecule drug targets. This cutting-edge approach has identified a shortlist of ~20 novel, high value synthetic lethal genes following a secondary screen to further validate them as targets. The partnership has been established to complete the target validation package for these novel targets, leading to the initiation of drug discovery programmes by C4XD should it exercise its options on a target-by-target basis. C4XD will provide the funding for the work plan and Horizon will receive a share of all future revenues C4XD receives should any drug discovery programmes emerging from the partnership be out-licensed for clinical development.

Dr Craig Fox, Chief Scientific Officer of C4XD, said: "PARP inhibitors are transforming the treatment of ovarian cancer, particularly in patients with BRCA mutations and so identifying the next generation of synthetic lethality drug targets is a key priority to develop new therapies for cancers patients who are not responsive to current treatments. This partnership with Horizon gives C4XD access to a comprehensive proprietary CRISPR screening dataset that has selected the most promising novel drug targets in colon and lung cancer. We look forward to working with the highly experienced team at Horizon to complete the target validation package for these novel genes and initiate drug discovery programmes to generate high value pre-clinical licensable assets for partnering."

Dr Jon Moore, Horizon’s Chief Scientific Officer added: "Drugging the cancer genome now requires new synthetic lethal therapies that can exploit the vulnerabilities in patient’s tumours that are created by mutations in undruggable cancer driver genes. Horizon’s internal research program has used powerful CRISPR technology to open a new window into how cancer cells are wired and has identified a cohort of novel targets. We are delighted to have secured this collaboration with C4X Discovery, which applies a powerful drug discovery engine to the first-in-class opportunities for transformational medicines represented by the targets Horizon has found and allows Horizon to share in the upside."