Champions Oncology Inc.

09/15/2025 | Press release | Distributed by Public on 09/15/2025 14:50

Quarterly Report for Quarter Ending July 31, 2025 (Form 10-Q)

Management's Discussion and Analysis of Financial Condition and Results of Operations
The following discussion of our historical results of operations and our liquidity and capital resources should be read in conjunction with the condensed consolidated financial statements and related notes that appear elsewhere in this Report and our 2025 Annual Report.
Forward-Looking Statements
This Report contains certain "forward-looking statements," which include information relating to future events, future financial performance, strategies, expectations, competitive environment, regulation, and availability of resources. These forward-looking statements include, without limitation, statements regarding: proposed new programs; expectations that regulatory developments or other matters will not have a material adverse effect on our financial position, results of operations, or liquidity; statements concerning projections, predictions, expectations, estimates, or forecasts as to our business, financial and operational results, and future economic performance; and statements of management's goals and objectives and other similar expressions concerning matters that are not historical facts. Words such as "may," "should," "could," "would," "predicts," "potential," "continue," "expects," "anticipates," "future," "intends," "plans," "believes," "estimates" and similar expressions, as well as statements in future tense, identify forward-looking statements.
Forward-looking statements should not be read as a guarantee of future performance or results and will not necessarily be accurate indications of the times at, or by, which such performance or results will be achieved. Forward-looking statements are based on information available at the time those statements are made or management's good faith belief as of that time with respect to future events, and are subject to risks and uncertainties that could cause actual performance or results to differ materially from those expressed in or suggested by the forward-looking statements.
Forward-looking statements speak only as of the date the statements are made. Factors that could cause actual results to differ from those discussed in the forward-looking statements include, but are not limited to, those described in "Risk Factors" in Part I, Item 1A of our 2025 Annual Report, as updated in our subsequent reports filed with the SEC, including any updates found in Part II, Item 1A of this or other reports on Form 10-Q, if any. You should not put undue reliance on any forward-looking statements. We assume no obligation to update forward-looking statements to reflect actual results, changes in assumptions, or changes in other factors affecting forward-looking information, except to the extent required by applicable securities laws. If we do update one or more forward-looking statements, no inference should be drawn that we will make additional updates with respect to those or other forward-looking statements.
Overview and Recent Developments
We are a technology-enabled research organization engaged in creating transformative technology solutions to be utilized in drug discovery and development. Our research center consists of a comprehensive set of computational and experimental research platforms. Our pharmacology, biomarker, and data platforms are designed to facilitate drug discovery and development at lower costs and increased speeds. We perform studies which we believe may predict the efficacy of experimental oncology drugs or approved drugs as stand-alone therapies or in combination with other drugs and can simulate the results of human clinical trials. These studies include in vivo studies that rely on implanting multiple tumors from our TumorBank in mice and testing the therapy of interest on these tumors. Studies may also include bioinformatics analysis that reveal the differences in the genetic signatures of the tumors that responded to a therapy as compared to the tumors that did not respond. Additionally, we provide computational or experimental support to identify novel therapeutic targets, select appropriate patient populations for clinical evaluation, identify potential therapeutic combination strategies, and develop biomarker hypothesis of sensitivity or resistance. These studies include the use of our in vivo, ex vivo, analytical and computational platforms.
We are engaged in the development and sale of advanced technology solutions and products to personalize the development and use of oncology drugs through our Translational Oncology Solutions ("TOS"). This technology ranges from computational-based discovery platforms, unique oncology software solutions, and innovative and proprietary experimental tools such as in vivo, ex vivo and biomarker platforms. Utilizing our TumorGraft Technology Platform (the "Platform"), a comprehensive bank of unique, well characterized Patient Derived Xenograft ("PDX") models, we provide select services to pharmaceutical and biotechnology companies seeking personalized approaches to drug development. By performing studies to predict the efficacy of oncology drugs, our Platform facilitates drug discovery with lower costs and increased speed of drug development as well as increased adoption of existing drugs.
We offer access to certain PDX model data via licensing agreements. As our Platform has been expanded over time with the collection of models and the enhancement of their characterization, we have developed a robust multi-omic dataset with substantial potential for both drug discovery and development. This dataset serves as a vital resource for both our pharmaceutical and biotechnology customer who gain access to model-specific data and further their research via licensed access.
We also offer Lumin Bioinformatics ("Lumin"), an oncology data-driven Software as a Service ("SaaS") program. Our Lumin software contains comprehensive information derived from our research services and clinical studies. Lumin leverages our large Datacenter coupled with analytics and artificial intelligence to provide a robust tool for computational cancer research. Insights developed using Lumin can provide the basis for biomarker hypotheses, reveal potential mechanisms of therapeutic resistance, and guide the direction of additional preclinical evaluations.
Our drug discovery and development business leverages the computational and experimental capabilities within our platforms. Our discovery strategy utilizes our Datacenter, coupled with artificial intelligence and other advanced computational analytics, to identify novel therapeutic targets. We then employ the use of our proprietary experimental platforms to validate these targets for further drug development efforts.
We have a pipeline of targets at various stages of discovery and validation, with a select group that has progressed to therapeutic development. Our commercial strategy for the validated targets and therapeutics established from this business is wide-ranging and still being developed. It will depend on many factors, and will be specific for each target or therapeutic area identified. All expenses associated with this part of our business are research and development and are expensed as incurred.
We regularly evaluate strategic options to create additional value from our drug discovery business, which may include, but are not limited to, potential spin-out transactions or capital raises.
Liquidity and Capital Resources
Our liquidity needs have typically arisen from the funding of our research and development programs and the launch of new products, working capital requirements, and other strategic initiatives. In the past, we have met these cash requirements through our cash on hand, working capital management, proceeds from certain private placements and public offerings of our securities and sales of products and services. For the three months ended July 31, 2025 and 2024, the Company had a net loss of $466,000 and net income of $1.3 million, respectively. As of July 31, 2025, the Company had an accumulated deficit of approximately $80.4 million, negative working capital of $1.7 million and cash of $10.3 million. For the three months ended July 31, 2025, the Company realized cash flow from operations of approximately $600,000. Despite our negative working capital at this date, we believe that our cash on hand, together with expected cash flows from operations, are adequate to fund operations through at
least October 2026. Should the Company be required to raise additional capital, there can be no assurance that management would be successful in raising such capital on terms acceptable to us, if at all.
Operating Results
The following table summarizes our operating results for the periods presented below (dollars in thousands):
For the Three Months Ended July 31,
2025 % of
Revenue 		2024 % of
Revenue
%
Change
Oncology revenue $ 13,995 100.0 % $ 14,061 100.0 % (0.5) %
Costs and operating expenses:
Cost of oncology revenue 7,995 57.1 7,072 50.3 13.1
Research and development 2,082 14.9 1,454 10.3 43.2
Sales and marketing 1,855 13.3 1,679 11.9 10.5
General and administrative 2,570 18.4 2,527 18.0 1.7
Loss on disposal of equipment 20 0.1 - - 100.0
Total costs and operating expenses 14,522 103.8 12,732 90.5 14.1
Income (loss) from operations $ (527) (3.8) % $ 1,329 9.5 % (139.7) %
Oncology Revenue
Oncology revenue, primarily derived from research services, totaled $14.0 million for the three months ended July 31, 2025, compared to $14.1 million for the same period in 2024, a decrease of $66,000 or 0.5%.
Our revenues are comprised of the following:
Three Months Ended
July 31,
(in 000s) 2025 2024
Pharmacology services $ 13,230 $ 13,069
TOS license revenue 311 -
Other TOS revenue 454 992
Total oncology revenue $ 13,995 $ 14,061
Pharmacology Services
•The slight increase in revenue comparing the three month periods ended July 31, 2025 to 2024 was the result of an increase in the bookings to revenue conversion rate. Bookings, which represent the total value of signed statements of work, convert to revenue over time as the Company fulfills its contractual performance obligations.
TOS Data License Revenue
•Revenue for the three months ending July 31, 2025 resulted from the sale of data licenses. There was no data license revenue for the three months ended July 31, 2024.
Other TOS Revenue
•Other TOS Revenue includes additional services provided to the Company's pharmaceutical and biotechnology customers, specifically flow cytometry and SaaS provided via Lumin.
•Our flow cytometry services revenue decreased approximately $540,000 for the three months ended July 31, 2025, due to a decline in clinical bookings and a de-emphasis on this business unit. The decrease in Other TOS Revenue was partially offset by a slight increase in our SaaS revenues for the three-month period ending July 31, 2025 as compared with 2024, of $1,000.
Cost of Oncology Revenue
For the three months ended July 31, 2025, cost of oncology revenue increased $923,000 or 13.1% to $8.0 million, compared to $7.1 million in the prior year period. The increase primarily reflects higher outsourced lab services for radiolabeling work, which will vary from quarter to quarter but should decrease as we migrate this work in-house.
Research and Development
Research and development expense for the three months ended July 31, 2025 and 2024 were $2.1 million and $1.5 million, respectively, an increase of approximately $628,000 or 43.2%.
The significant components of research and development expense are comprised of the following:
Three Months Ended
July 31,
(in 000s) 2025 2024
Compensation $ 875 $ 605
Laboratory Supplies 637 490
Mice Costs 19 100
Outside Services 448 52
The overall increases in research and development expense for the three month period was primarily the result of an increase in outsourced lab services, compensation, and lab supplies as we increase investment in our data licensing platform and for Corellia, our wholly owned subsidiary focused on target discovery.
Sales and Marketing
Sales and marketing expenses for the three months ended July 31, 2025 and 2024 were $1.9 million and $1.7 million, an increase of $176,000 or 10.5%. The increase was related to compensation expense to support the growth of our data license business.
General and Administrative
General and administrative expenses for the three months ended July 31, 2025 and 2024 were $2.6 million and $2.5 million, respectively, a slight increase of $43,000, or 1.7%. General and administrative expenses are primarily comprised of compensation, insurance, professional fees, IT and depreciation and amortization expenses.
Cash Flows
The following discussion relates to the major components of our cash flows:
Cash Flows from Operating Activities
For three months ended July 31, 2025, net cash provided by operating activities was $600,000. The cash provided by operating activities was supported by receivables conversion and normal working capital activity, partially offset by a quarterly net loss. For the three months ended July 31, 2024, net cash provided by operating activities was $311,000. The cash provided by operating activities was primarily due to income from operations offset by changes in our working capital accounts in the ordinary course of business.
Cash Flows from Investing Activities
Net cash used in investing activities for the quarter was approximately $46,000. This was the result of purchases of lab and computer equipment during the quarter. The cash used in investing activities for the three months ended July 31, 2024 was $0.
Cash Flows from Financing Activities
Net cash used in financing activities was $14,000 for the three months ended July 31, 2025 resulting from financing lease payments partially offset by proceeds received for stock options exercises. Net cash used in financing activities was $37,000 for the three months ended July 31, 2024, resulting from financing lease payments.
Critical Accounting Estimates and Policies
There have been no changes to our critical accounting policies during the three months ended July 31, 2025. Critical accounting policies and the significant estimates made in accordance with such policies are regularly discussed with our Audit Committee. Those policies are discussed under "Critical Accounting Policies" in "Part II. Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations" as well as in our Condensed Consolidated Financial Statements and the footnotes thereto, each included in our 2025 Annual Report.
Off-Balance Sheet Financing
We have no off-balance sheet debt or similar obligations. We have no transactions or obligations with related parties that are not disclosed, consolidated into or reflected in our reported results of operations or financial position. We do not guarantee any third-party debt.
Champions Oncology Inc. published this content on September 15, 2025, and is solely responsible for the information contained herein. Distributed via SEC EDGAR on September 15, 2025 at 20:51 UTC. If you believe the information included in the content is inaccurate or outdated and requires editing or removal, please contact us at [email protected]