Joel Ackerman – CEO.

Thomas Shelton.

Good afternoon, I’m Joel Ackerman the CEO of Champions Oncology. Thank you for joining us for our quarterly earnings call. After a brief introduction I will cover the highlights since our last call, talk about the financial results and then open it up to questions.

Before I start I will remind you that I will make forward-looking statements during the call and actual results could differ materially from what is described in those statements.

Also additional information on factors that could cause results to differ is available in our Form 10Q and 10K, reconciliation of these non-GAAP financial measures that maybe discussed on the call to GAAP financial measures is available in the earnings release.

We currently anticipate that our 10K for fiscal year ending April 30, 2014 will be filed on Monday July 28th. Our fiscal fourth quarter which ended in April was the culmination of the Europe’s great progress for Champions.

As I step back and look at the company today versus where we were 3.5 years ago when Ronnie Morris and I took over the leadership of the company, it's remarkable how far we have come. We started with eight employees, $3 million of core revenue and limited experience with our TumorGraft technology platform.

Over these years we have grown the company to 65 employees almost $12 million in revenue and have proven to ourselves and others the value of our platform.

From the new senior managers who choose to join Champions to the deals we have signed with Pfizer and Mount Sinai to the papers and posters that have demonstrated the predictivity in value of TumorGraft’s or proud of the validation we have generated about our technology and business model.

As a result of all this, we believe we’re nearing the end of the proof of concept phase of our development from a scientific standpoint we have demonstrated that our technology is predictive of human response to cancer drugs.

From an operational standpoint we have proven we can operate a lab with 1000s of mice and provide quality studies with great customer service to pharma companies and patients and from a commercial perspective we have proven that customers are willing to pay for our technology.

As we exit the proof of concept stage of development, we’re entering the next stage namely scaling the platform. The power of our platform will continue to grow as we scale the company. As we think about how to invest our resources both financial resources and human resources scaling our company is our top priority.

Scale to us is not one thing, it includes growing the number of patients benefiting from TumorGraft’s, increasing the number of models and the information in our tumor bank, expanding our platform to research and development partnering with physicians and academic medical centers to expand awareness and reach and growing our revenue through bigger and better relationships with our pharmaceutical companies.

These growth initiatives are the key to our success in the next phase of development. We’re excited for the opportunities this transition presents us and are confident that we have a team that can deliver or managing through the inevitable challenges that we will encounter. I will now elaborate on four specific highlights since our last call.

First, for the fourth fiscal quarter we implanted 1100 patients this was a record quarter for us and getting over the 100 patients per quarter milestone was an exciting accomplishment. 66 of these implants came from the commercial patient business, the POS business an increase of 57% over the last year.

The balance came largely from research collaboration and clinical trials. As we think about the scheme of scale there is no metric more important to us than scaling the in-flow of implants to grow the tumor bank. The second accomplishment would be imitation of a clinical trial in partnership with the Icahn School of Medicine at Mount Sinai.

This trial will evaluate the use of Champions TumorGraft’s in a 100 patients with Triple-Negative Breast Cancer. This study will also include a side-by-side genomic analysis of the patients tumor and TumorGraft before and after treatment.

We are excited about the opportunity to partner with Mount Sinai to further validate the use of TumorGraft models and to add a sizeable cohort of Triple Negative Breast models to our tumor bank. This is a great example of one of the ways we’re pushing towards scale by accelerating the growth of models in our bank.

The third accomplishment was the publication of two articles in well regarded peer view journals that add to the body of literature that speak to the validity of our platform. One article published in clinical cancer research talks about the value of integrating next generation sequencing with TumorGraft’s to personalize care for patients.

I’m asked frequently if our technology is competitive with genomic sequencing in personalizing cancer care for patients. Our view has long been that there are limitations to both technology platforms so ultimately we believe they are synergistic. This article goes a long way towards confirming that viewpoints.

The second article published in the Journal Cancer focuses on the predictive power of TumorGraft’s for personalizing the care of advanced sarcoma patients. Despite representing fewer than 1% of the new cancer diagnosis in the United States every year, sarcoma represents about 15% of their new patients.

This paper highlights the opportunity we have to help this heterogeneous set of patients as they battle this terrible disease with very limited options. Finally I would like to highlight the significant changes we have made to our sales team that focuses on pharmaceutical industry.

When I joined the company 3.5 years ago we had one sales person reporting directly to me, calling on the pharmaceutical industry. Overtime we increased after sales people each with direct -- we increased that to three sales people each with direct responsibility for all customers, big and small in each of three territories.

We successfully grew business with that structure for a couple of years but realized that to truly scale the commercial efforts to a new level and take advantage of the larger market potential we would need to restructure the selling effort and grow the team.

To that end over the last six months we have grown and upgraded the sales team to seven people with direct support from two senior executives.

As part of this growth we have also restructured the effort with a small team dedicated to our top accounts, this ensures a more consistent and concentrated sales effort aimed at our highest potential customers while ensuring sufficient time and incentives for our regionally focused team members to focus on the mid-tier and smaller accounts.

This new structure, new team is now in place and is getting up to speed quickly, because of the transition and the ramp up time we did see a softness in bookings that will impact next quarter’s revenue.

However we are committed to doing what is needed for the long term growth of the company and based on the activity levels we’re seeing from the new team, we believe this was the right investment for the future growth of the pharma business. As a final note before covering the financials, we have posted a new investor presentation on our website.

It does not reflect the significant strategic change in our business but I think it is worth a quick look to understand how the way we are presenting our operations is evolving. A particular note is the way we are positioning the TOS business as a clinical trial simulation product.

Again this does not reflect any strategic changes but it does recognize the value we’re bringing in helping pharmaceutical companies answer some of the clinical development questions the grapple with and the dramatic increase in the number of models involved in the individual studies we’re now quoting.

It also helps answer a frequent question we get namely how big is the market for the TOS business. Based on our analysis the pharmaceutical industry spends between 12 billion and 13 billion a year on clinical trials and oncology. We believe we can stimulate those trials with our TumorGraft platform for about 10s of 15% of the cost of the human trial.

That math says that the available market for TOS clinical trial simulation is between $1.5 billion and $2 billion per year. However as I hope I have made clear before we need to scale the platform and particularly at tumor bank to allow us to capture a significant portion of the available market.

Now let me color the financial results, the results were strong and represent the culmination of a great year for us. As we have said before we do expect our results to continue to bounce around one quarter to the next, but the overall trend is very positive. During the quarter we implanted 1100 new patient tumors, an increase of 141% over last year.

66 of these implants come from our commercial TOS offering which represents 57% year-over-year growth. Results were particularly strong in Singapore where the impact of the relationship we highlighted last quarter with TCC, the largest private oncology group in Singapore has really started to kick in.

We have also seen continued year-over-year growth in implants from our research partnerships. During the quarter we completed test for a total of 17 patients flat with the same quarter last year. We did not see any particular trend driving the lack of growth in the number of patients that we need to test.

We’re still the size where the volatility from one quarter the next will influence our results and continue to emphasize that we must assess our progress from one year to the next without getting distracted by quarterly variability. TOS revenues were $430,000 and 11% decrease over the same quarter last year.

Most of the revenue decline is attributable to the continued decline of revenue from the non-core products we offer. As we stated in the past we expect this revenue to continue to decline as we emphasize these products and focus our efforts on our core technology offerings. Revenue from our core POS products declined by 5% from the prior year.

This was the result of an increase in revenue from the POS implants offset by a decline in revenue from TOS drug panels primarily resulting from the decrease in number of tests per panel. The decline in number of test per panel is influenced by two factors.

First the geographic mix of patients changes from quarter-to-quarter and the number of test per patient varies considerably across our geographies.

Second as our patient base grows we have an increasing number of patients who are coming back to us for a second panel of tests after having benefited from the first -- from the results of our first panel. As you may know patients with advanced tumors typically develop resistance overtime to the cancer drug they take.

So even if the drug works it will not work indefinitely. For these patients we can regrow their original TumorGraft’s, or do a new implant and do a second round of tests to help find the next drug for them. The second panel tends to include fewer tests than the first panel and as a result they bring down the average number of tests per panel.

Overall I would emphasize that in the near term the growth in the number of patients using our technology to feed the growth of the tumor bank is a more important metric of success in the actual revenue growth of the POS business.

POS gross margins were negative 45% in the quarter, the gross margin in this business is driven by a number of factors including business mix, pricing and volumes. There is a significant fixed cost associated with personnel and overhead in the lab that does not vary with volumes or revenue.

In quarters like this where the revenue was down, those fixed costs are spread over a lower revenue total which results in a significantly lower gross margin. We will continue to focus on this metric with the goal of continued improvement in the future. Now let me talk about TOS, the business that serves the pharmaceutical industry.

TOS revenues were $2 million for the quarter, an increase of 56% over last year. Full year revenue growth from TOS for the year was 57%, this was a very successful year for the TOS business.

Besides this great revenue increase, we have grown our customer base and increased both the breadth and depth of the types of studies we’re providing to the pharmaceutical industry.

We have also set the stage for another great year with the reputation for scientific integrity and customer service that we have built and the increase in sales capacity that I’ve mentioned before. But as I’ve highlighted every quarter since we started these calls we do not expect the progress to be smooth from one quarter to the next.

As I have mentioned earlier in the call because of the transition we have made in the size and structure of the sales force combined with the expected quarterly volatility we know that the TOS revenue in the July quarter will be below the $2 million we have delivered this quarter.

We have seen volatility like this before and remain confident in our ability to grow the TOS business in the new fiscal year. TOS gross margins were 54% for the quarter versus 30% for the same quarter last year. I would not read anything into the dramatic improvement and year-over-year gross margins.

There are lot of factors that impact gross margins on a quarterly basis. Over the long term we will continue to focus in improving our margins by improving our pricing profile with customers and driving down cost by leveraging fixed overhead and finding economies of scale.

Briefly regarding our operating expenses, sales and marketing expenses continue to grow as we increase the sales effort. This is an important investment in the future growth of the company and we think it will pay dividends and continue the growth in fiscal 2015.

The story in R&D is similar to sales and marketing, the growth of the tumor bank and other investments in the platform are key to building the company and we expect to show accelerating investment in R&D during the fiscal 2015.

G&A was also up over last year’s as a result of our continued investment in growing our senior management team to lead the development of the company. Our cash position at the end of April was $5.9 million basically unchanged from the end of January.

This was the result of the collection of the large account receivable that was on the balance sheet of January from Pfizer. We have started to think about rebuilding our cash position over the coming quarters to continue to finance the growth of the company.

In conclusion we’re very proud of the progress we’re making and excited about the opportunity ahead of us. We serve a large market with an important unmet need and we have got a leadership position that we believe can sustain and grow with scale, innovation and execution. That is the end of my prepared remarks. I will now open up to call to questions..

(Operator Instructions) An your first question comes from the line of Thomas Shelton. Mr. Shelton your line is live..

I was curious as to what the cost of the Icahn trial is going to be and who is paying for it?.

We haven't disclosed the cost they will be paying for part of it including some of the patient recruitment and data collection efforts. We will largely be paying for the cost that we incur which are namely the lab cost..

And there are no questions in queue at this time..

Great. Well thank you all for joining us today and we look forward to keeping you updated in the future..

This concludes this afternoon’s teleconference. You may now disconnect your lines..