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Champions Oncology Reports Financial Results for the Quarter Ended July 31, 2012

HACKENSACK, N.J., Sept. 12, 2012 /PRNewswire/ -- Champions Oncology, Inc. (OTC: CSBR), engaged in the development of advanced technology solutions and services to personalize the development and use of oncology drugs, announced today its financial results for its first fiscal quarter ended July 31, 2012.

Joel Ackerman, Champions Oncology CEO, stated, "We are pleased with our continual progress and are focused on continuing to grow our Tumorbank as a source of value creation."

Operating revenues were $2.1 million, as compared to $1.6 million for the three months ended July 31, 2011.

Total operating expenses were $3.7 million, as compared to $3.8 million for the three months ended July 31, 2011.

Champions reported a net loss of $1.3 million, or ($0.03) per share, as compared to $2.0 million, or ($0.04) per share, for the first quarter ended July 31, 2011.

Excluding stock based compensation of $0.7 million for the 2012 period and $1.0 million for the 2011 period, Champions recognized a net loss of $0.6* million, or ($0.01*) per share for the first quarter ended July 31, 2012, as compared to a net loss of $1.0* million, or ($0.02*) per share for the first quarter ended July 31, 2011.

Operating ResultsPersonalized Oncology Solutions (POS) revenues were $0.9 million and $0.6 million for the 2012 and 2011 periods, respectively, an increase of $0.3 million, or 50%.  The increases in POS revenues were driven by an increased number of drug studies completed during the quarter.  During the three months ended July 31, 2012, the Company completed 13 drug studies, compared to only one completed in the prior year. These increases are the result of the steady increase in the number of TumorGrafts performed which have moved onto drug studies.

POS Cost of Sales was $0.8 million and $0.5 million for the 2012 and 2011 periods, respectively, an increase of $0.3 million, or 60%.  Gross margins for POS were 11% and 17% for the 2012 and 2011 periods, respectively.  The decline in gross margin can be attributed to increased costs related to transitioning our laboratory activities in-house from a third-party laboratory.  This transition, which is expected to yield future cost savings through higher utilization of capacity, began during the second half of fiscal 2012 and was substantially completed during the first quarter of fiscal 2013.

Translational Oncology Solutions (TOS) revenues were $1.2 million and $1.0 million for the three months ended July 31, 2012 and 2011, respectively, an increase of $0.2 million, or 20%.  The increase in TOS revenues was due primarily to higher numbers of models sold as a result of our increased investment in our Tumorbank.

TOS Cost of Sales were $0.7 million and $0.4 million for the 2012 and 2011 periods, respectively, an increase of $0.3 million, or 75%.  Gross margins for TOS were 42% and 60% for the 2012 and 2011 periods, respectively.  The decline in gross margin can be attributed to additional costs associated with transitioning laboratory activities in-house from a third-party laboratory.  Specifically, we have made additional investments in our infrastructure and our laboratory staff to increase productivity and to support current and expected volumes.

Research and development expenses were $0.4 million and $0.5 million for the three months ended July 31, 2012 and 2011, respectively.  This decrease was primarily related to decreased tumor procurement costs, resulting from our strategy to source models from our POS business.

Sales and marketing expenses for each of the periods were $0.7 million.  Employee-related costs associated with our sales force and marketing personnel increased $0.2 million, but this was offset by a decrease in marketing activities.

General and administrative expense was $1.1 million and $1.7 million for the respective 2012 and 2011 periods, a decrease of $0.6 million, or 35%.  This decrease can be attributed to reductions in stock-based compensation expenses and consultant costs.

* Non-GAAP Financial InformationSee the attached Reconciliation of GAAP Net Loss to Non-GAAP Net Loss for an explanation of the amounts excluded to arrive at non-GAAP net loss and related non-GAAP loss per share amounts for the three months ended July 31, 2012 and 2011.  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 loss and non-GAAP loss per share are not, and should not be viewed as a substitute for similar GAAP items.  We define non-GAAP diluted loss per share amounts as non-GAAP net loss divided by the weighted average number of diluted shares outstanding.  Our definition of non-GAAP net loss and non-GAAP diluted loss per share may differ from similarly named measures used by others.

Full details of the Company's financial results will be available in the Company's Form 10-K at

About Champions Oncology, Inc.Champions Oncology, Inc. is engaged in the development of advanced technology solutions and services to personalize the development and use of oncology drugs.  The Company's Tumorgraft Technology Platform is a novel approach to personalizing cancer care based upon the implantation of primary human tumors in immune deficient mice followed by propagation of the resulting engraftments, or Tumorgrafts, in a manner that preserves the biological characteristics of the original human tumor.  The Company uses this technology in conjunction with related services to offer solutions for two customer groups:  Personalized Oncology Solutions ("POS") in which physicians and patients looking for information help guide the development of personalized treatment plans, and Translational Oncology Solutions ("TOS") in which pharmaceutical and biotech companies seeking personalized approaches to drug development can lower the cost and increase the speed of developing new drugs and increasing the adoption of existing drugs. The Company's Tumorgraft Technology Platform consists of processes, physical tumors and information that we use to personalize the development and use of oncology drugs.  The Company is building its Tumorgraft Technology Platform through the procurement, development and characterization of numerous Tumorgrafts within each of several cancer types. Tumorgrafts are procured through agreements with a number of institutions in the U.S. and overseas as well as through its POS business.  The Tumorgrafts are developed and tested in the Company's laboratory facility in Baltimore, Maryland.

Our POS business offers physicians and patients information to help guide the development of personalized treatment plans.  Our core offering utilizes our technology platform to empirically test the response of a patient's tumor to multiple oncology drugs or drug combinations.  The process begins by implanting a fresh fragment of the patient's tumor, typically received within 24 hours of surgery or biopsy, in a small colony of immune-deficient mice to grow the tumor tissue.  This colony is then expanded by implanting the grown tumor tissue into subsequent generations of mice until a sufficient number of mice are available for testing.  At that point, the colony is allocated to different groups, and each mouse in a group is dosed with a different drug or drug combination.  The response of the tumor in each mouse is tracked over time and analyzed to determine which drug or drug combination is providing the highest level of tumor growth inhibition.  Our data demonstrates that there is a high correlation between the response to drugs of the tumor in mice with the response of the tumor in the patient.

This press release may contain "forward-looking statements" (within the meaning of the Private Securities Litigation Act of 1995) that inherently involve risk and uncertainties.  Champions Oncology generally uses words such as "believe," "may," "could," "will," "intend," "expect," "anticipate," "plan," and similar expressions to identify forward-looking statements.  One should not place undue reliance on these forward-looking statements.  The Company's actual results could differ materially from those anticipated in the forward-looking statements for many unforeseen factors.  See Champions Oncology's Form 10-K for the fiscal year ended April 30, 2012 for a discussion of such risks, uncertainties and other factors.  Although the Company believes the expectations reflected in the forward-looking statements are reasonable, they relate only to events as of the date on which the statements are made, and Champions Oncology's future results, levels of activity, performance or achievements may not meet these expectations.  The Company does not intend to update any of the forward-looking statements after the date of this press release to conform these statements to actual results or to changes in Champions Oncology's expectations, except as required by law.

Champions Oncology, Inc.
 (Dollars in thousands except per share amounts)

 Reconciliation of GAAP to Non-GAAP Net LossQuarter Ended July 3120122011Net loss – GAAP


($2,037)Less: Stock-based compensation


1,014Net loss - non-GAAP


($1,023) Reconciliation of GAAP to Non-GAAP Earnings Per Share (EPS)Quarter Ended July 320122011EPS – GAAP


($0.04)Less: Effect of stock-based compensation on EPS


0.02EPS - non-GAAP


($0.02) Condensed Consolidated Statements of Operations (Unaudited)Quarter Ended July 31 20122011POS operating revenue


$601TOS operating revenue


1,033  Total operating revenue$2,106$1,634Cost of POS


483Cost of TOS


419Research and development


541Sales and marketing


688General and administrative


1,717  Loss from Operations($1,599)($2,214)Other Income


177  Net Loss before income tax expense($1,320)($2,037)Income taxes


-  Net Loss($1,323)($2,037)  Earnings per share- basic and diluted($0.03)($0.04)Weighted average shares outstanding- basic and diluted


46,420,000 Condensed Consolidated Balance Sheets Balance as of  July 31, 2012(unaudited)April 30, 2012Cash and cash equivalents


$4,716Accounts receivable


584Other current assets


205  Total current assets3,7635,505Restricted cash


188Property and equipment, net




669  Total assets$5,145$6,922Accounts payable and accrued liabilities


$2,301Deferred revenue


1,185  Total current liabilities2,5533,486Warrant liability


555Redeemable common stock


8,159Stockholders' deficit


(5,278)  Total liabilities, redeemable common stock and stockholders' deficit$5,145$6,922 

 Condensed Consolidated Statements of Cash Flows (Unaudited)Quarter Ended July 3120122011Cash flows from operating activities:Net Loss


($2,037)Adjustments to reconcile net cash used in operations:  Stock-based compensation expense


1,014  Depreciation expense


29  Change in fair value of warrant liability


(177)  Changes in operating assets and liabilities


(364)Net cash used in operating activities(1,806)(1,535)Cash flows from investing activities:  Purchases of property and equipment


(95)Net cash used in investing activities:(19)(95)Cash flows from financing activities:  Proceeds from exercise of options and warrants


4Net cash provided by financing activities:-4Exchange rate effect on cash and cash equivalents


8Decrease in cash and cash equivalents


(1,618)Cash and cash equivalents, beginning of period4,71610,457Cash and cash equivalents, end of period$2,916$8,839 

CONTACT: Susan Foreman, +1-201-808-8400

SOURCE Champions Oncology, Inc.
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