Greetings. Welcome to the Champions Oncology Fourth Quarter Fiscal Year 2021 Earnings Call. [Operator Instructions] Please note, this conference is being recorded. I will now turn the conference over to your host, Dr. Ronnie Morris, CEO. Dr. Morris, you may begin.

Good morning. I'm Ronnie Morris, CEO of Champions Oncology. Joining me today is David Miller, our CFO. Thank you for joining us for our fiscal year-end 2021 earnings call. Before I begin, I'll remind you that I'll be making forward-looking statements during today's call and that actual results could differ materially from what is described in those statements. Additional information on factors that could cause results to differ is available in our Form 10-Q and Form 10-K. Reconciliation of the non-GAAP financial measures that may be discussed during the call to GAAP financial measures is available in the earnings release. Overall, we had another year of significant progress, successfully expanding our business and core capabilities, while continuing to evolve and deliver on our longer-term strategy. I would like to key in on our strategy as we embark on some exciting and transformational times. Since the inception of Champions, we had a clear appreciation for the value contained within the rare data set that we were building. Our tumor bank and the information we create are unique for several reasons. First, unlike most other tumor models used in research, our models are highly representative of tumors present within a clinical setting. This means that the data sets established using our models provide more accurate and relevant insights. Second, our approach to using a living tumor bank of PDX models means that we have a perpetual source of tumor, allowing for a continuous and a deep level of characterization. Specifically, we can establish multiple drug response data sets from the same tumor or reinterrogate these tumors with newly approved drugs or drug combinations. We can also fully characterize the molecular nature of these tumors using multiple analytical methods. As new technologies emerge or are optimized, such as proteomic analysis, we can acquire and integrate this new data into our existing information. Third, by leveraging a living tumor bank of PDX models, we can manipulate these tumors and simulate important therapeutic or molecular scenarios that are otherwise unavailable in other tumor models. This combination of a unique tumor bank and the phenotypic, genotypic and response information combined with our operational excellence have been key elements behind our ability to aggressively grow our services. The value of information we produce has been proven by the growth in our services business. More than 500 pharmaceutical and biotech companies have used and relied on the data we created for them across thousands of studies. They have used information in both preclinical and clinical settings to identify targets, look for early signs of efficacy, identify subpopulations and look for mechanisms of action for their drug programs. While we always knew that the data set being a mass was unique and valuable, we were laser-focused on expanding our platform services business and becoming a profitable company. After achieving profitability, we started looking for additional business models that would allow us to leverage our information in higher-value, higher-margin businesses that would accelerate our revenue and long-term profit growth. We started this transition last year with the rollout of a new discovery platform that would allow customers to derive additional value from our PDX information. Lumin is a revolutionary data interpretation software capable of analyzing proteomic, genomic and transcriptomic data sets in real-time, providing scientists with the ability to gain novel insights at their fingertips. The power of Lumin is in the ability to explore data assembled from our PDX models as well as over 20,000 cancer data sets that includes thousands of clinical treatment responses that are not available in any public data set. We have been licensing this platform to our customers using a SaaS model and the uptake has been exciting. Both large and small companies are represented in the customers that have used this platform's range of analysis and visualization tools in all stages of drug development. To demonstrate the combined power of our information and the Lumin analytical tools, we have developed in-house computational target discovery expertise to interrogate our data sets using Lumin's capabilities. This team, which relies heavily on AI and machine learning algorithms, has been able to use our deeply characterized data set to discover novel therapeutic targets. Computational approaches have emerged as a central mechanism for target discovery in recent years. This approach has the potential to reduce the time required for target discovery and increases the scale of which new drug programs can be initiated. However, these computational approaches often suffer from poor quality of the underlying data set that is available for mining. Our computational approach leverages a more complete data set that is derived from tumor models of a more authentic tumor cell biology and heterogeneity. As a result, our computational analysis identified targets that are overlooked or missed when using other data sets. The extensive preclinical platform available in our labs also allows us to take the computationally derived targets and quickly and efficiently validate them. To date, we have validated more than 6 interesting targets, and we are in the process of advancing those targets through the development pipeline. We plan to invest between $2 million and $4 million over the next 2 years to bring some of these targets forward to the IND-enabling stage. We have many options to advance these novel targets, which include partnering, licensing or internal development. Depending on how far we want to take a compound forward before finding a partner, we think each compound could generate upfront payments with milestone and royalty payments on the back end. We are still early in this process, but the interest we have received from discussions with the potential partners is exciting. While we plan to continue to grow the profitability of our services business, we have increased our R&D spending, which is primarily due to investments made in the discovery and validation of therapeutic targets in addition to the continued development of the Lumin software. In summary, we are evolving our business model to capture more of the value from the proprietary data that we create. To effect this transformation, we reorganized the company into a dynamic ecosystem of business units, centered around a world-leading oncology research center that is based off our unique data and experimental platforms. We continue to focus and be excited about our growing core services business. In addition to our services business, we have added an innovative SaaS business and an AI-powered target discovery drug initiative. While both new opportunities are still in the early stages, they are growing in potential and excitement throughout the organization. Now let me turn the call over to David Miller for a more detailed review of the financial results.

Thanks, Ronnie. Our full results on Form 10-K will be filed with the SEC on or before July 29. Overall, we had another year of significant financial progress and success. We continue to grow our revenue in our core research service business, and we're anticipating contribution from newly launched platforms such as Lumin going forward. We currently have more than 75 unique users, and we're looking for that number to grow in fiscal year 2022. Our full year revenue for 2021 was a record $41 million compared to $32 million for 2020, representing year-over-year growth of 28%. Income from operations was $338,000 compared to a loss of $1.9 million in the year ago period. Excluding stock comp and depreciation, we recognized income from operations of $2.1 million compared to a loss of $100,000 a year ago. Turning the focus to the fourth quarter. Revenue increased to approximately $10.6 million compared to $8.8 million in the year ago period, an increase of $1.8 million or 21%. As discussed on our prior earnings call, fourth quarter revenue will be impacted by studies completing earlier than projected and the associated revenue was recognized in the third quarter, leading to the slight decline in quarterly sequential revenue. We recognized a loss of $456,000 for the quarter compared to a loss of $2 million in the year ago period. Excluding stock-based comp and depreciation, we recognized a small fourth quarter gain of $7,000 compared to a loss of $1.2 million in the year ago period. Turning to expenses, excluding stock comp and depreciation. Our cost of sales was $5.6 million for the fourth quarter of fiscal 2021 versus $5 million for the same period last year, an increase of $621,000 or 12%. The increase was primarily due to 2 factors: the first was an increase of approximately $400,000 in costs related to clinical flow studies, with a portion of this expense recognized in advance of any revenue; the second was an increase in our rent expense as we expanded our lab space during the quarter. This move should provide the additional capacity to match our expected growth. It will result, however, in additional rent expense of approximately $250,000 per quarter. As a result of these factors, there was added pressure on our gross margin for the quarter, which finished at 47% compared to 43% in the year ago period. As we move forward, we expect improving margins for a few reasons. First, as these flow studies complete, the revenues will be recognized with some of the costs already recorded. Additionally, we will leverage our new fixed rent costs against increasing top line revenue. Sales and marketing expense was $1.4 million compared to $1 million in the year ago period. For the year, sales and marketing expense was $5.3 million compared to $4 million in the year ago period. The increase was mainly due to compensation expenses resulting from commissions earned and salary expense as we continue the expansion of our business development team, including the creation of a dedicated Lumin sales group. Looking ahead to this year, we anticipate a continued expansion of the business development team and marketing efforts. R&D expense for the quarter was approximately $2.1 million compared to $1.8 million in the year ago period, an increase of $250,000 or 14%. As Ronnie outlined, we've embarked on a path to increase our R&D spend to invest in transformative opportunities for the company. That spend has begun, and we anticipate quarterly R&D expenses to be in the $2 million rate for fiscal year 2022. For the year, R&D expense was $7.2 million compared to $5.8 million last year, an increase of $1.4 million or 23%. Our G&A expense was $1.5 million compared to $2.2 million in the year ago period. The decrease was mainly due to the onetime payment in Q4 2020 to our CEO for salary not taken in prior years. Excluding the onetime catch-up payment, G&A remained flat from the prior year fourth quarter. For the full year, excluding the aforementioned payments, G&A expense increased $300,000 or 10%. While G&A will nominally increase due to the overall company growth, it should continue to decline as a percentage of revenue over the year. Now turning to cash. We ended the year with $4.7 million in cash on the balance sheet. For the quarter, cash used in operations was $2 million, mainly due to the normal variability in the timing and accounts receivable and an increase in prepaid expenses. Cash used in investing activities was $800,000, primarily associated with CapEx investment for our slow and fast business line. With our anticipated revenue growth, we expect to be cash flow positive in fiscal year 2022. We ended our year in a strong cash position with the ability to continue to invest in both our target discovery and our Lumin SaaS platform outlined by Ronnie. In summation, looking back at our fiscal year 2021 results, we reached another annual revenue record as we exceeded $41 million and grew our top line by 28%. For the full year, we achieved profitability, and we are positioned to capitalize on the exciting opportunities that lie ahead. For fiscal year 2022, we're projecting revenue growth between 10% and 20%. As we're nearing the end of our first quarter 2022, we'll provide another update in about 6 weeks when we report our first quarter results. We will now open the call to questions.

[Operator Instructions] Our first question comes from Matt Hewitt with Craig-Hallum.

Maybe the first one, David, on the guidance, 10% to 20% in fiscal '22, you just put up 28% growth. I think you've got a pretty nice track record of nearing 20% growth. Is that just conservative? The reason for bringing in the low end there, what would cause growth to, I guess, dip below even the midpoint of the range?

I think it's a combination of 2 factors. Number one, yes, we generally certainly want to be more conservative. It's still early in the year, so we don't have the full picture in terms of what's going to occur in the second half of 2022. We're certainly going to strive to meet our historical revenue growth percentages. And the second is simply as we continue to grow, hitting those same percentages become a little bit more difficult. Certainly, there's opportunity for us to match our historical revenue growth. Growth from our existing service businesses and obviously, the new opportunities that we're looking forward. So it's obviously being a little bit conservative, but definitely reasonable. And I think if we do 20%, that's also a very nice year as well.

Got it. Okay. And then just a handful of items, but I'm going to kind of go through them here. So first, on the base business, the flow pipeline, so you started booking some deals last year. Have you actually started to record revenues on those? And what is that pipeline looking like? How will those hit starting in fiscal '22, the revenue piece of it?

Yes. So we started recording -- we certainly started recording some revenue. It's contributing. It's not a very significant factor to our overall revenue. It will become a little bit more in 2022. It's not going to break -- make or break the year. And in terms of the overall pipeline, I don't know, Ronnie, if you want to take it or I can start. Certainly, I think the method has been pretty consistent with our flow revenue business. Certainly, it took a little while for it to get started. It took a little bit longer. We certainly have seen an uptick. It is contributing to our revenue and the pipeline is growing, but it is still a little bit behind in terms of our expectations to where we thought we would be at this point.

Got it. Okay. And then regarding -- kind of moving on to Lumin here. So I think you provided the update, 75 unique license holders. How have those discussions kind of ramped over the course of the year? What kind of feedback are you getting from customers? I think you're probably right now just starting to have the renewal discussions. How are those proceeding? Anything along those lines?

Yes. So we haven't had the renewal discussions yet. We're just starting to have those right now. So we don't really have any data on that, but that's clearly something we're looking at very carefully, and we're trying to understand the user base even from the early days. What are they -- what do they like about it? What other -- the functionality would they like to see? So as I think we've said previously in the past, it's still early days. We're still learning a lot about the customer base at that, who is using it, why are they using it. We're excited by the number of users, the number of people looking at the platform. We've also made a lot of upgrades and we continue to make upgrades to the platform. So still early days, optimistic, but we're cautiously optimistic as we continue to understand why people are using it, how they like it and what improvements we can make to make them either use it more or have more users on the system.

Got it. And then maybe last question for me and then I'll hop back in the queue. I think you previously had announced a partnership with BGI Americas. Any update on how that's proceeding? That'll do it.

Yes. We -- the partnership just started, so we really don't have much to report on that. I think the important thing about that partnership is that there are many the companies like BGI that produce a lot of data but don't really have a home for that data and don't have a place that they can easily transmit that data to the clients, who request the data in order to analyze it and look at the data. So we see that as the first of many of our users to be able to use outside vendors put the data into our system so they could easily digest the data, analyze it and understand the data.

[Operator Instructions] Our next question comes from Christopher Hillary with Roubaix Capital.

Could you give us a use case that you're comfortable sharing on Lumin? And how you see those use cases developing as your product offering continues to grow and mature?

So I'm not exactly sure of your question, but I can give you a couple of specifics about kind of who our users are. And so we have a couple of different types of users currently at this time. We have the bioinformaticians who use it more deeply, who actually want to go and try to analyze and develop and understand on more of a deep level some of the biomarker hypothesis. And then we have the principal investigators or the biologists that are just looking for the causality or the relationships between different characteristics within a tumor or within oncology. So those are kind of our users right now. We have user base that includes both institutions who have taken some seats as well as solo private investigators within a pharma or a biotech company, and that's kind of our user base. So in terms of that, that's probably the best way I could answer that question.

Okay. And then maybe one more, if you wouldn't mind. Could you remind us how your database, how you kind of formed the database? I think it has to do with the primary and secondary kind of ownership of the data rights just as a way for us to continue to appreciate the breadth and depth of your data that these users are accessing.

So the data within our -- the data within our database is a little bit different than the data within Lumin. Lumin is a combination of both our data, from our database as well as many, many public data sets that we have aggregated. In terms of our data that we bring to the table and our data sets, those are derived primarily from our tumor bank, which are derived from the patients where we have a lot of clinical information, and we also have information on treatments that were performed on the tumors within our tumor bank as well as the characterization around those tumors. So it will be the RNA and the DNA sequencing, proteomics and a whole bunch of other levels of characterization.

Our next question is a follow-up from Matt Hewitt with Craig-Hallum.

Just on the exciting news regarding the internal development plan, maybe if you could go in a little bit as far as, I think, you mentioned 6 targets that you've already identified, how many teams do you or people do you have working on these plans? How far through the process do you, I guess, envision taking this? Is this something that, in some cases, maybe you take it all the way through to commercialization? Or in others, are you looking to license this once you've proven a valid target? Just a little bit more color there would be helpful.

Yes. Sure, Matt. So we're very excited about this initiative. We've talked about it and thought about it for a long time. We have a couple of teams. Probably, right now, about 10 internal people, some consultants on the outside who are helping us, working to identify the targets and then go in back to our labs and to validate those targets, which is a huge advantage from our perspective to be able to take many, many, many targets, which we have. And go back and actually validate them because that's the key step here. So the range of the possibilities once we have a target are multiple, as I mentioned. Some we see a path where we're going to try to do some of the optimization of a compound ourselves and try to go a little further down the path. Some we think that it makes more sense for us to partner with another entity and kind of co-jointly move that target through the drug development pathway. And some, we think it's just right for outlicensing these targets coming out of our platform. So I think it's a combination approach. A lot of it has to do with the type of target or the type of molecule we're looking for. Some, I think we feel more comfortable doing ourselves. A lot of it have to do with the economics. So there's a lot of variables. Again, as I said before, with some of our other initiatives, this is kind of early stages or early days. I think you can expect to hear some announcements over the next couple of months, maybe next quarter to of some of these targets and how we're dealing with them. But we're excited, and it's kind of early days, and we're just exploring and mining our data and finding some really interesting stuff out there.

Our next question comes from Clay Hoffman, a private Investor.

For first quarter, do you have any guidance on the revenue yet?

I mean I think we'll stick with the overall guidance for the year, which is the 10% to 20%. We haven't generally not provided specific quarterly guidance.

Okay. And one follow-up. On the targets, would any of them be considered orphan status drugs?

No, no. These would not be considered orphan status drugs. No.

Thank you. Ladies and gentlemen, we have reached the end of the question-and-answer session. I will now turn the call over to Dr. Ronnie Morris for closing remarks.

Thank you. I just want to thank everybody for joining our call. We have some really exciting initiatives. As we continue to grow our core businesses, we look forward to the new initiatives, including the SaaS platform as well as our target discovery platform, and we look forward to continuing over the next couple of quarters, giving updates to everybody as we get the news. So thank you for joining, and we'll speak to everybody in 6 weeks. Bye.

This concludes today's conference, and you may disconnect your lines at this time. Thank you for your participation, and have a wonderful day.