Champions Oncology Inc (CSBR) 2024 Q1 法說會逐字稿

Greetings. Welcome to the Champions Oncology first quarter fiscal year 2024 earnings call. (Operator Instructions) I will now turn the conference over to your host Dr. Ronnie Morris, CEO at Champions Oncology. You may begin.

問候。歡迎參加 Champions Oncology 2024 財政年度第一季財報電話會議。 （操作員指示）我現在將會議轉交給主持人 Ronnie Morris 博士，他是 Champions Oncology 的執行長。你可以開始了。

Good afternoon, I am Ronnie Morris, CEO, Champions Oncology. Joining me today is David Miller, Chief Financial Officer. Thank you for joining us for quarterly earnings call. Before I begin, I will remind you that we make forward looking statements during today's call, and that actual results could differ materially from what described in those statements.

下午好，我是冠軍腫瘤學執行長羅尼莫里斯。今天加入我的是財務長大衛米勒 (David Miller)。感謝您參加我們的季度財報電話會議。在開始之前，我要提醒您，我們在今天的電話會議中做出了前瞻性聲明，實際結果可能與這些聲明中描述的內容有重大差異。

Additional information on factors that could cause results to differ is available on our Form 10-Q, and Form 10-K. A reconciliation of non-GAAP financial measures that may be discussed during the call to GAAP financial measures is available in the earnings release.

有關可能導致結果不同的因素的更多信息，請參閱我們的表格 10-Q 和表格 10-K。收益報告中提供了在 GAAP 財務指標電話會議期間可能討論的非 GAAP 財務指標的調整表。

I'll start by pointing out, that our prepared comments for today will be relatively brief, as we recently provided our fiscal year end results and company updates six weeks ago. On that call, I provided an update on the accomplishment from fiscal year 2023, along with longer term strategic vision for the company.

首先我要指出的是，我們今天準備的評論將相對簡短，因為我們最近在六週前提供了財年最終結果和公司最新情況。在那次電話會議上，我介紹了 2023 財年的最新成就以及公司的長期策略願景。

I also highlighted the challenges we encountered such as the overall economic environment which led to cancellations well in excess of our historical norms. Additionally, we identified some operational issues that led to slower revenue conversion and put pressure on our operating results that would extend into fiscal year 2024.

我還強調了我們遇到的挑戰，例如整體經濟環境導致航班取消遠遠超出了我們的歷史標準。此外，我們還發現了一些營運問題，這些問題導致收入轉換放緩，並對我們的營運業績造成壓力，這種壓力將持續到 2024 財年。

As indicated those challenges are impacting our current year's results. However, I am cautiously optimistic that we have made significant progress towards reversing those trends. We have made the necessary operational changes with some key hires and internal restructuring that we're confident will lead to greater efficiencies and an improvement in our operations.

正如所表明的，這些挑戰正在影響我們今年的業績。然而，我對我們在扭轉這些趨勢方面取得的重大進展持謹慎樂觀的態度。我們已經透過一些關鍵人員的招募和內部重組進行了必要的營運變革，我們相信這將提高我們的效率並改善我們的營運。

Externally, some of the economic pressures that were impacting customer behavior, resulting in longer sale cycle and higher and quicker propensity to cancel certainty study seemed to be easing. On a positive note, our quarterly bookings have continued to grow, and we are seeing a softening of the cancelations over the last couple of months retreating towards historical levels.

從外部來看，一些影響客戶行為、導致銷售週期更長、取消確定性研究的傾向更高、更快的經濟壓力似乎正在緩解。從積極的方面來看，我們的季度預訂量持續增長，我們看到過去幾個月的取消量有所減少，回落至歷史水平。

We continued to be excited about expanding Ex Vivo platform which we anticipate will lead to increased sales and revenue growth over the coming quarters. In our bio -- in our clinical Biomarker services, we made some key business development hires during this quarter. We have seen increase in lead generation in addition to an update in clinical booking.

我們仍然對 Ex Vivo 平台的擴展感到興奮，我們預計這將導致未來幾季的銷售額和收入成長。在我們的生物—臨床生物標記服務中，我們在本季度招募了一些關鍵的業務開發人員。除了臨床預約的更新之外，我們還看到潛在客戶的產生增加。

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

正如多年來所討論的，臨床工作的收入周期比我們的傳統服務更長。但管道和預訂量的增加是積極的發展，隨著時間的推移，有助於我們的收入成長。

With regards to Corellia, our wholly owned drug development subsidiary, our lead discovery programs are progressing well through the therapeutic discovery stages, with our two lead programs exhibiting promising results. We have begun building therapeutic programs around these targets. Our platform has identified many other exciting targets, and we are actively engaged with investors in an effort to raise capital to support and accelerate our growth.

至於我們全資擁有的藥物開發子公司 Corellia，我們的先導藥物發現計畫在治療發現階段進展順利，我們的兩個先導計畫顯示出有希望的結果。我們已經開始圍繞這些目標制定治療計劃。我們的平台已經確定了許多其他令人興奮的目標，我們正在積極與投資者合作，努力籌集資金以支持和加速我們的成長。

In summary, our quarters performance is generally as expected. We anticipate that improvements will slowly take hold and put us back on our targeted path. Despite being in a challenging period, we continue to have a robust bookings and comprehensive platform and [stellar] reputation and a strong team that is poised for the next growth spurt. We are confident that we will emerge with strong revenue and profitability over the longer term. Now let me turn the call over to David Miller for a more detailed review of the financial results.

綜上所述，我們的季度業績整體符合預期。我們預計改進將慢慢發生並讓我們回到目標道路上。儘管正處於充滿挑戰的時期，我們仍然擁有強勁的預訂量、全面的平台和[一流的]聲譽，以及一支為下一次增長做好準備的強大團隊。我們相信，從長遠來看，我們將獲得強勁的收入和獲利能力。現在讓我將電話轉給大衛·米勒，以更詳細地審查財務業績。

Thanks, Ronnie. Our full results on Form 10-Q, we filed with the SEC later today. Our first quarter revenue was $12.6 million, a decline of 9% on the first quarter of 2023. As highlighted on our year-end call and reiterated by Ronnie, the challenges encountered last year will impact our financial performance in the first half of 2024, with a gradual improvement occurring over the course of the year.

謝謝，羅尼。今天晚些時候，我們向 SEC 提交了 10-Q 表中的完整結果。我們第一季的收入為1260 萬美元，比2023 年第一季下降9%。正如我們在年終電話會議中所強調的那樣，並由Ronnie 重申，去年遇到的挑戰將影響我們2024 年上半年的財務業績，並在這一年中逐步改善。

On a GAAP basis, our loss from operations for the first quarter of 2024 was $2.6 million compared to a loss of $284,000 in the prior year. Included in the $2.6 million loss were non-cash expenses of stock comp and depreciation -- totaling approximately $900,000. Excluding these non-cash items, our adjusted loss was $1.7 million for the quarter compared to adjusted EBITDA of $450,000 in the year-ago period.

根據 GAAP 計算，我們 2024 年第一季的營運虧損為 260 萬美元，而上一年的虧損為 28.4 萬美元。 260 萬美元的損失包括股票補償和折舊等非現金費用，總計約 90 萬美元。不包括這些非現金項目，本季調整後的虧損為 170 萬美元，而去年同期調整後的 EBITDA 為 45 萬美元。

Turning the focus to our cash-based results. The total cost of sales was $7.5 million compared to $6.9 million in our first quarter last year, an increase of 9%. The increase relative to the same period last year was primarily due to an increase in outsourced lab services and mouse [traps].

將焦點轉向我們以現金為基礎的業績。總銷售成本為 750 萬美元，與去年第一季的 690 萬美元相比，成長了 9%。與去年同期相比的成長主要是由於外包實驗室服務和捕鼠器的增加。

Due to the increase in cost of sales on lower revenue, our gross margin for the quarter was 40% compared to 50% for the same period last year. The margin pressure will continue for the next few quarters, but we anticipate gradual improvement as our revenue accelerates over the course of the year, while our cost of sales will increase at a much slower rate.

由於收入下降導致銷售成本增加，本季毛利率為 40%，而去年同期為 50%。未來幾個季度，利潤率壓力將持續存在，但我們預計，隨著我們的收入在一年中加速成長，利潤率壓力將逐漸改善，而我們的銷售成本將以較慢的速度成長。

For the quarter, R&D expense was approximately $2.8 million compared to $2.9 million in the year-ago period. Our R&D spend is split between our traditional R&D supporting our core business services and investing in our drug discovery platform. Approximately $1.2 million was invested towards our drug discovery efforts during the quarter.

本季研發費用約 280 萬美元，去年同期為 290 萬美元。我們的研發支出分為支援核心業務服務的傳統研發和藥物發現平台的投資。本季我們為藥物發現工作投資了約 120 萬美元。

Sales and marketing expense for the quarter was a flat $1.6 million. Our G&A expense was $2.3 million compared to $1.9 million in the year-ago period, an increase of $400,000. The increase was primarily due to a small increase in compensation expense, and the bad debt and credit loss allowances.

該季度的銷售和行銷費用為 160 萬美元。我們的一般管理費用為 230 萬美元，而去年同期為 190 萬美元，增加了 40 萬美元。增加的主要原因是賠償費用、壞帳準備和信用損失準備小幅增加。

Now turning to cash. We ended the year with $5 million of cash -- we ended the quarter with $5 million of cash on the balance sheet and no debt. For the quarter, cash used in operating activities was $3.8 million with an additional $700,000 for investment in less equipment, and $600,000 in financing activities as part of our stock repurchase plan.

現在轉向現金。我們年底時擁有 500 萬美元現金，本季末資產負債表上擁有 500 萬美元現金，沒有債務。本季度，經營活動使用的現金為 380 萬美元，另外 70 萬美元用於減少設備投資，作為我們股票回購計畫的一部分，融資活動使用 60 萬美元。

The accelerated cash burn for the quarter was due to multiple factors, including our net loss and a return of customer deposits on canceled studies, which reduced our deferred revenue and cash balance. As our operational results improved, cancellations decreased, and with our bookings, which are a leading indicator to higher revenue, continuing to grow our cash position -- remains solid and will gradually increase over the second half of the year.

本季現金消耗加速是由於多種因素造成的，包括我們的淨虧損和取消研究的客戶存款返還，這減少了我們的遞延收入和現金餘額。隨著我們的營運業績改善，取消預訂減少，我們的預訂量（收入增加的領先指標）繼續增加我們的現金狀況，保持穩定並將在今年下半年逐漸增加。

Information, our first quarter financial results were mostly as expected, which was that our results would still be impacted by the challenges faced in our fiscal 2023. However, with our continued strength in bookings and with the operational corrections made beginning to take effect, and with an improving economic environment we are experiencing, we're confident that despite some short-term obstacles our long-term prospects are positive.

據了解，我們第一季的財務業績基本上符合預期，即我們的業績仍將受到 2023 財年面臨的挑戰的影響。然而，隨著我們在預訂方面的持續強勁以及營運調整開始生效，並且隨著我們正在經歷的經濟環境不斷改善，我們相信，儘管存在一些短期障礙，但我們的長期前景是樂觀的。

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

我們預計，隨著時間的推移，我們的營運表現將緩慢但穩定地改善，包括收入成長和獲利能力。我們期待 12 月中旬的下一次更新，屆時我們將報告第二季度業績，現在我們將開始提問。

Thank you. (Operator Instructions)

謝謝。 （操作員說明）

Matt Hewitt, Craig-Hallum Capital Group. Matt, your line is live.

馬特·休伊特，克雷格-哈勒姆資本集團。馬特，你的線路已上線。

Good afternoon and thank you for taking the questions. Maybe first one regarding the landscape. Obviously, we've been hearing not just from you guys on your Q4 call, but today and we've heard from others that it's just a really difficult environment right now.

下午好，感謝您提出問題。也許是第一個關於風景的。顯然，我們不僅在第四季的電話會議上聽到了你們的聲音，而且今天我們也從其他人那裡聽到了，現在的環境非常困難。

Pharma and biotech companies are facing funding pressures. There're all sorts of issues, what are you hearing from your customers as far as these cancellations are concerned? It sounds like it's coming down, but is that a function of them reprioritizing pipelines?

製藥和生物技術公司正面臨資金壓力。存在各種各樣的問題，就這些取消而言，您從客戶那裡聽到了什麼？聽起來好像正在下降，但這是否是他們重新調整管道優先順序的結果？

Is it a function of kind of shifting gears and maybe exiting one area to focus on something else, and that's what this next leg is going to be? Or is there something else driving the I guess, what's in improving bookings situation?

這是一種換檔的功能，也許是離開一個區域而專注於其他事情，而這就是下一站的內容？或是還有其他因素在推動預訂狀況的改善嗎？

Yes, I think it's like I think, Matt, it's a combination of all of the above. I think that the cancellations that we had over the last couple of quarters, were primarily from things that booked a little earlier. And those I think were driven more by, I would say, the budgetary concerns of, are they are they going to be funded?

是的，我認為這就像我所想的那樣，馬特，這是以上所有內容的結合。我認為過去幾個季度我們的取消主要是因為提前預訂了一些東西。我認為這些項目更多是由預算問題驅動的，他們是否會得到資助？

I think that the newer ones are more of a prioritization where they are might book something, and then they might decide as with the landscape, they want to prioritize one thing over the other. I think, as I would say, two comments, and these are all very general because there's so many anecdotes.

我認為較新的人更多的是優先考慮，他們可能會預訂一些東西，然後他們可能會根據情況做出決定，他們想要優先考慮一件事而不是另一件事。我認為，正如我想說的，有兩個評論，這些評論都很籠統，因為有很多軼事。

But I would say two comments, one that we have seen a palpable kind of a decrease in -- cancellations over the last couple of months. So, it was just one month or two months now it's the third month. So, we're kind of confident that from that perspective, those are moving in the right direction.

但我想說兩點意見，其中之一是我們看到過去幾個月取消預訂的情況明顯減少。所以，才一兩個月，現在已經是第三個月了。因此，我們有信心從這個角度來看，這些正在朝著正確的方向發展。

And I would say the second thing is that we feel like things are opening up more now in terms of the on the mood, or the on the feeling -- the biotech's feeling like things are opening up for them to raise money and continue to fund their program. So, it's certainly not the way it was a couple of years ago, in terms of just a tremendous amount of influx and the feeling like there's always going to be money available. But we feel much better than we did, let's say, a year ago.

我想說的第二件事是，我們覺得事情現在在情緒或感覺方面正在變得更加開放——生物技術公司感覺事情正在開放，他們可以籌集資金並繼續提供資金他們的計劃。因此，就大量湧入和總有錢可用的感覺而言，這肯定不是幾年前的樣子。但我們感覺比一年前好多了。

Got it. So maybe more back to a more normalized of capital. That's super helpful. And then, question regarding the gross margin, some of the decline year on year was due to increased outsourcing that you guys are doing. Are those are any of those services something that in theory you guys could bring in-house at some point, to reduce your dependence on others to complete some of these studies?

知道了。因此，也許更多地會回歸到更正常化的資本。這非常有幫助。然後，關於毛利率的問題，同比下降的部分原因是你們正在進行的外包增加。理論上，這些服務是否是您們可以在某個時候引入內部的服務，以減少您對他人完成某些研究的依賴？

Yeah, we could for some of them, I would say the biggest pressure on the gross margins was just some of the delayed studies and the repeating of studies, which we think we have a pretty good handle on now, and that goes to the mouse costs increase, because we're using more mice to get the same amount of work done. So, I think that those pressures on the gross margin are probably the largest pressures that I think and over the next couple of months, certainly next couple of quarters, I think we're going to turn back around.

是的，我們可以對其中一些進行，我想說，毛利率面臨的最大壓力只是一些延遲的研究和重複的研究，我們認為我們現在已經很好地處理了這些問題，而這就是滑鼠的問題成本增加，因為我們使用更多的滑鼠來完成相同數量的工作。因此，我認為毛利率面臨的壓力可能是我認為的最大壓力，在接下來的幾個月，當然是接下來的幾個季度，我認為我們將扭轉局面。

Got it. And then maybe one last one for me and I'll hop back into queue. I think you were commenting on the Biomarkers and some of the key hires that you're able to get there. You've seen an increase in lead gen and your clinical bookings are improving.

知道了。然後也許是我的最後一件事，我會跳回隊列。我認為您正在評論生物標記以及您能夠到達的一些關鍵員工。您已經看到銷售線索的增加，並且您的臨床預約也在增加。

How should we thinking about size of some of those types of studies? Are they bigger than your historical studies or, just I know it's they've got a longer lead time. So, I'm just thinking theoretically, those should be larger right.

我們應該如何考慮其中一些類型研究的規模？它們比你的歷史研究更大嗎？或者，我只知道它們的準備時間更長。所以，我只是從理論上思考，這些應該更大吧。

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

然而，它們的大小各不相同，主要是因為對於某些類型的臨床生物標記物，您首先簽署一項研究只是為了查看測定的驗證。然後，如果您成功驗證了該檢測，並且生物技術或製藥公司喜歡該檢測及其工作方式，那麼他們就會找到更大規模的研究。

So, it comes at or it's a validated assay ready. And then it's a larger study to begin with. So, I think that they're all different sizes. And from our perspective, I think it took us a couple of years to get our operations correct. And remember, we had talked many years about how it just took us longer to get the labs running efficiently with the right type of regulatory and operational efficiencies. We've accomplished that.

所以，它已經到來或已經準備好經過驗證的測定。然後這是一項更大規模的研究。所以，我認為它們的尺寸都不同。從我們的角度來看，我認為我們花了幾年時間才使我們的營運正確。請記住，我們已經討論了很多年，我們只是花了更長的時間才能讓實驗室以正確的監管和營運效率有效運作。我們已經做到了。

The second part was to get the business development team that can actually go out and spread the word that we are in the services because this is a new service line for us. It's a relatively new service line for us to get the word out, that the high quality we do in preclinical work, we can also do it clinical services as well.

第二部分是讓業務開發團隊能夠真正走出去並宣傳我們的服務，因為這對我們來說是一條新的服務線。對我們來說，這是一個相對較新的服務領域，我們在臨床前工作中所做的高品質工作，我們也可以提供臨床服務。

And that's why we're excited about this new key hires in the business development team, because we think now, we are able to go out and spread the word and let people know the high-quality work that we do, which will lead to increased business, which we're already starting to see.

這就是為什麼我們對業務開發團隊的新關鍵員工感到興奮，因為我們認為現在我們能夠出去傳播訊息，讓人們知道我們所做的高品質工作，這將導致業務量增加，我們已經開始看到這一點。

That's great. Thank you.

那太棒了。謝謝。

David Baron, Baron Capital. David, your line is live.

大衛‧巴倫，巴倫資本。大衛，你的線路已上線。

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

下午好，莫里斯。我想問你一個關於招募的問題。我知道冠軍隊正在尋找人才。您的結果是否影響您的招募目標？您的招募目標是增加還是減少？您希望填補的這些職位是初級職位還是高階管理人員，您正在尋找經驗豐富的員工？

Yes. So, we certainly have a couple of positions we're looking to hire, but we do not have a lot of positions looking to hire. We have a fairly good team I mean, when I say good team and we're very good team in terms of quality people, but we have we're fairly well positioned that I think we at this point, considering certainly our history, we have very few positions available on.

是的。因此，我們當然有幾個職位需要招聘，但我們沒有很多職位需要招聘。我們有一支相當優秀的團隊，我的意思是，當我說優秀的團隊時，我們在人才方面是非常優秀的團隊，但我們處於相當有利的位置，我認為我們在這一點上，當然考慮到我們的歷史，我們空缺職位很少。

So, I'm not sure the question in terms of hiring, but I don't think our hiring has changed. We have a certain expectation for the bookings. We have a certain expectation for the work we want to do, and we have outfitted the organization to meet those expectations.

所以，我不確定招募方面的問題，但我認為我們的招募沒有改變。我們對預訂有一定的期望。我們對我們想做的工作有一定的期望，並且我們已經為組織配備了滿足這些期望的裝備。

And certainly, for like the scientific operation like the Ex Vivo platform and the Biomarkers, we have built a team that has excess capacity because we need that team in place, needs to be operational efficient, operationally efficient with good quality. And we expect that over the next year or two, we'll be able to fill it up and we'll be able to continue to work efficiently. So, I don't know that we have that many openings right now. We always have openings, there is always some bit of turnover, but I think we're hiring the same. We've always hired.

當然，對於像 Ex Vivo 平台和生物標記物這樣的科學操作，我們已經建立了一個能力過剩的團隊，因為我們需要這個團隊就位，需要高效運作、高效運作和良好的品質。我們預計在未來一兩年內，我們將能夠填滿它，並且我們將能夠繼續有效率地工作。所以，我不知道我們現在有這麼多空缺。我們總是有空缺職位，總是會有一些人員流動，但我認為我們正在招募同樣的人。我們一直都是僱用的。

Thank you.

謝謝。

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

謝謝，目前線路中沒有其他問題。我現在想將電話轉回給莫里斯博士，讓其致閉幕詞。

Thank you for joining us for our quarterly earnings call, lot of good things happening at Champions Oncology. We're very excited about the drug discovery effort that we have. And we're very excited about some of the new assays that we've been rolling out, especially our Ex Vivo assay. We continue to be excited about our In Vivo work that we do, and clearly the Biomarker that we perform for biopharma.

感謝您參加我們的季度財報電話會議，冠軍腫瘤學發生了很多好事。我們對我們的藥物發現工作感到非常興奮。我們對我們推出的一些新檢測方法感到非常興奮，尤其是我們的體外檢測方法。我們繼續對我們所做的體內工作感到興奮，顯然我們為生物製藥所做的生物標記。

So, on all areas, I think we continue to have an excellent reputation in the marketplace for doing good, high-quality work. We are scientifically inclined collaborative, and I think those are all the recipes for continued success. So, we look forward to discussing those with you on our next quarterly call, and thank you, everybody, and have a good afternoon.

因此，在所有領域，我認為我們繼續在市場上因出色、高品質的工作而享有良好的聲譽。我們傾向於科學合作，我認為這些都是持續成功的秘訣。因此，我們期待在下一個季度電話會議上與您討論這些問題，謝謝大家，祝大家下午愉快。

Thank you. This does conclude today's conference. You may disconnect your lines at this time. Thank you for your participation.

謝謝。今天的會議到此結束。此時您可以斷開線路。感謝您的參與。