On September 13, 2023 Champions Oncology, Inc. (Nasdaq: CSBR), a leading global technology-enabled biotech that is transforming drug discovery through innovative AI-driven pharmaco-pheno-multiomic integration, reported its financial results for its first quarter of fiscal 2024, ended July 31, 2023 (Press release, Champions Oncology, SEP 13, 2023, View Source [SID1234635135]).

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First Quarter and Recent Highlights:

•First quarter revenue of $12.6 million, a decline of 9%
•Strong quarterly bookings
•Hosting Scientific Symposium in Boston, MA on September 26th

Ronnie Morris, CEO of Champions, commented, "As outlined on our year-end earnings call, the down-turn in the economy, and specifically the biotech sector, was going to weigh on the Company into the start of our new fiscal year. While this is playing out as expected, demand for our services has remained strong and we’re beginning to see a positive trend in customer spending and a reduction in cancellations. Morris added, "our drug discovery initiative, operating under a wholly owned subsidiary, Corellia AI, continues to progress as we’re building therapeutic programs around two lead targets while other, new targets are being identified. We are actively engaged with investors in an effort to raise capital to support and accelerate these programs."

David Miller, CFO of Champions, added, "As we indicated last quarter, the increase in study cancellations during fiscal year 2023 would lead to lower revenue in the first half of 2024, impacting profitability. As our bookings grow and cancellations decline, we anticipate increasing quarterly revenue over the remainder of the year and gradually improving financial performance."

First Fiscal Quarter Financial Results

Exhibit 99.1

Total revenue for the first quarter of fiscal 2024 was $12.6 million compared to $13.7 million for the same period last year, a decrease of 8.6%. The decline in revenue resulted from customer cancellations during fiscal year 2023 which led to lower revenue conversion in our first quarter. Total costs and operating expenses for the first quarter of fiscal 2024 were $15.1 million compared to $14.0 million for the first quarter of fiscal 2023, an increase of $1.1 million or 7.7%.

For the first quarter of fiscal 2024, Champions reported a loss from operations of $2.6 million, including $423,000 in stock-based compensation and $445,000 in depreciation and amortization expenses, compared to a loss from operations of $284,000, inclusive of $206,000 in stock-based compensation and $528,000 in depreciation and amortization expenses, in the first quarter of fiscal 2023. Excluding stock-based compensation, depreciation and amortization expenses, Champions reported an adjusted EBITDA loss of $1.7 million for the first quarter of fiscal 2024 compared to adjusted EBITDA of $450,000 in the first quarter of fiscal 2023.

Cost of oncology solutions was $7.7 million for the three-months ended July 31, 2023, an increase of $632,000, or 9.0% compared to $7.1 million for the three-months ended July 31, 2022. The increase in cost of sales was primarily from outsourced lab services. For the three-months ended July 31, 2023, total gross margin was 38.8% compared to 48.7% for the three-months ended July 31, 2022. The lower margin resulted primarily from a higher expense base on lower revenue conversion percentages, with additional pressure stemming from the increase in outsourced services.

Research and development expense for the three-months ended July 31, 2023 was $2.8 million, a slight decrease of $94,000 or 3.3%, compared to $2.9 million for the three-months ended July 31, 2022. Approximately $1.2 million of the Company’s R&D expense was directed towards our target discovery program. Sales and marketing expense for both the three-months ended July 31, 2023 and July 31, 2022 was $1.7 million. General and administrative expense for the three-months ended July 31, 2023 was $2.9 million, an increase of $542,000, or 22.6%, compared to $2.4 million for the three-months ended July 31, 2022. The increase was primarily due to an increase in the provisions for bad debt and credit losses of approximately $160,000 and non-cash stock-based compensation expense.

Net cash used in operating activities was $4.0 million for the three-months ended July 31, 2023. The cash used in operating activities was primarily due to an increase in accounts receivable due to timing differences in the ordinary course of business and a decrease in deferred revenue as a result of study cancellations. Net cash used in investing activities was $670,000 from investment in additional lab and computer equipment. Net cash used in financing activities was $590,000 resulting from repurchases of common stock related to our stock buy-back program offset slightly by proceeds from options exercises.

The Company ended the quarter with cash and cash equivalents on hand of approximately $5.0 million. The Company has no debt.

Conference Call Information:
The Company will host a conference call today at 4:30 p.m. EDT (1:30 p.m. PDT) to discuss its first quarter financial results. To participate in the call, please call 888-506-0062 (Domestic) or 973-528-0011 (International) and enter the access code 417178, or provide the verbal reference "Champions Oncology".