CHAMPIONS ONCOLOGY, INC. Q3 FY2025 earnings call

• Q3 was a transformative quarter with record revenue and successful closure of the first data deal.
• Core services business is driven by the PDX bank and multiomic data, which is a foundation for biopharma pharmacology studies.
• Dedicated efforts to strengthen teams and refine processes led to enhanced quality, efficiency, scalability, cost management, and profitability.
• PDX bank offers invaluable insights for drug development, with an expanding multiomic data set and increased demand due to AI.
• Recently closed data deal aligns with the strategy to create the world's most comprehensive biological data set.
• Corellia, the drug development subsidiary, is raising capital for its targets and compounds.

In Q3, total revenue was a record $17 million. Research service revenue was $12.5 million (compared to $12 million in the year-ago period), and data revenue contribution was $4.5 million. Year-to-date, total revenue was $45 million (an increase of 22% from the first three quarters of 2024). Research service margins were 48% in Q3 and 48% for the three quarters ended January 31, 2024, up from 40% in the prior period. Adjusted EBITDA was a record $5.2 million in Q3, and $8.3 million year-to-date.

• Reaffirmed full-year revenue growth guidance of 10% to 15%.
• Expect cash position to increase in coming quarters as operational results improve and data revenue stream progresses.

• Tight industry environment leading to potential performance volatility.
• Uncertainty around the number of data deals, their average size, and frequency of occurrence.

Q: Could you indicate how the licensing deal is constructed and any other opportunities in the pipeline?

A: The licensing deal was a one-time fee for a portion of data, and they are actively talking to multiple biotech and pharma partners about the data's value.

Q: Given uncertainty in tariffs and budget cuts, any impact on customer conversations?

A: Tariffs may not have specific effect yet, but the environment remains tight, and they've handled it by focusing on larger biopharmas and operational efficiency.

Q: Any hope for turnaround in biotech customer demand?

A: There's still investment in pharma, biotech, and oncology, with some silver linings but still a mildly challenging time.

Q: Color on capital raising for Corellia?

A: It's a spin-out, wholly owned, and they're raising capital; Champions expects to retain a percentage, with a different investor base.

Q: Data pricing models and future potential?

A: Exploring different models like license fees, royalties, and milestones, starting with proof of concept and evaluating market response.

Q: Competition in data space?

A: They're unique with deep multiomic data, differing from others with broad but shallow data, and AI makes their data more valuable.

Q: AI in legacy business?

A: Not yet seen significant impact on core research business.

Q: AI use in clinical setting with data?

A: Biomarker use is interesting but not the main driver yet for data use.

Q: Abstracts at cancer research meeting?

A: Excited about continued innovation and abstracts showing R&D edge.

Q: PDX data team and go-to-market?

A: Separate team handles data side, with crossover between sales/business development and data strategy teams.

Q: Size of $5 million license deal relative to total data pie?

A: Not publicly announced, as deal sizes vary by customer stage.

Q: Data go-to-market team?

A: Dedicated team with a general manager and data sciences head handling data sales.

Q: Pipeline of data deals in 2025?

A: Have a pipeline, talking to people, with deals varying in size.