Sick Economics

Searching For Healthy Profits In The Stock Market


Champions Oncology Stock Analysis

By Tammy Tran, Biotech Analyst


Champions Oncology ($CSBR) is a technology company that combines innovative pharmacology, biomarkers, and data platforms to transform drug discovery. They were recently founded in 2007 where they began researching solid tumors and launching their TumorGrafts platform using patient-derived xenograft models (PDX Models). PDX models are when pieces of a patient’s cancerous tumor is implanted into an immune deficient or humanized mouse. These are extremely useful in tumor biology, because it allows you to observe the natural progression of the cancer and offers the most research for efficacy information. Champions’ TumorGrafts were created by extrapolating a live sample of the tumor of a cancer patient and implanting it into a mouse, creating a mouse avatar. Once the tumor began to grow, it was propagated into a second generation of mice and tested against various cancer drugs and drug combinations to determine the best treatment plan for a specific patient. These mice avatars help test which drugs would be ineffective or even harmful for the cancer patient, without directly having to test on the patient. 

Then in 2015, Champions Oncology launched their ImmunoGraft Platform. The ImmunoGraft Platform combined their TumorGraft patient-derived xenograft (PDX) models and humanized immune system mice, created by “inoculating human hematopoietic cells into immunodeficient mice”. Although that sounds a little complicated, hematopoietic cells are just cells that come from the blood or bone marrow that can develop into all types of blood cells, including red, white and platelets. Another term for these are called blood stem cells. And then immunodeficiency is a state in which the immune system’s ability to fight infectious diseases and cancer is compromised or absent. Therefore, these humanized immune system mice were created by injecting these blood stem cells into mice with a compromised immune system. Then implanting the TumorGrafts that were discussed earlier into these humanized immune system mice creates a tool that allows the researchers to evaluate and examine the mechanisms of actions of various cancer therapeutics that affect the human immune system. 

Soon after in 2016, Champions Oncology launched both their HemOnc PDX Platform and their Syngeneic & Cell Line Platform. The HemOnc PDX platform models hematology oncology malignancies for both acute lymphocytic leukemia (ALL) and acute myelocytic leukemia (AML). ALL is a form of acute leukemia (acute leukemia means that the disease grows quickly) that begins in cells that become lymphocytes- white blood cells that play a vital role in your immune system. AML is the other form of acute leukemia, which begins in early myeloid cells (important defender cells against infection in the mammal immune system) that become white blood cells, red blood cells, or platelet-making cells. The HemOnc PDX platform collects samples from AML and ALL patients to engraft into the humanized mice. In addition, this platform also models patient populations as their cancer progresses by collecting blasts from patients. Both of these approaches are advantageous because they allow to model large numbers of mice across an established patient sample group. 

It is important to notice the milestones that Champions Oncology has taken as a business. As soon as Ronnie Morris (MD, and a founder of MDVIP- the national leader in personalized healthcare) and Joel Ackerman (successful leader of Warburg Pincus- private equity investment firm) joined the company in 2011, they took the information from their past laboratory data and turned the company in a whole new direction. In 2012, the company made a strategic decision to aggressively grow their biology and computational database. This is a large change from before, since prior to this, they were mainly focused on laboratory work and biological research. By 2015, their data bank was able to reach 1,000 models and launched their immuno-oncology (IO) platform in 2016. The IO platform allows researchers to test their cancer therapeutics in a 3D organoid assay that can mimic the mechanism of action.

sickeconomics amazon author banner

By 2018, they were finally able to reach profitability. Ever since then, their company has been using their profits to continue expanding. The oncology market alone continues to soar. According to their investor presentation, the oncology market will double between 2019 and 2024. The oncology contract research organization (CRO) market is expected to reach $44 billion by 2021. A CRO is a company that provides support to the pharmaceutical, biotechnology, and medical industries in the form of research services outsourced on a contract basis, which is one of Champions’ primary goals, is to outsource tests and laboratory services through their large research background. So, if Champions Oncology is to be able to turn even 10% of that market into revenue, they can expect to see over $4 billion in revenue. This is just limiting their market to specifically oncology services. If you continue to expand their market to other groups that are applicable to them, their revenue has the potential to increase even more. For example, the oncology market (not oncology CRO) is expected to be $175 billion and the pharma market is $725 billion. This is a huge growth opportunity for Champions Oncology, if they continue launching additional platforms and expanding their company. If you look at their financial statements, you can see that they are generating a 20% year over year revenue growth. However, their trailing P/E ratio is N/A and profit margin is still in the negatives. This means that all of the money they are making is being put back into the company for continued growth and expansion, and that investors are predicting high forward P/E ratios for the future. Another important thing to note is how they are using data and software to continue their growth, which is a large pivot from strictly laboratory testing. If successful, pushing themselves as a software company means that the stock prices will continue to increase. 

A huge milestone in this direction is that “Champions Oncology and BGI Americas Announce a Strategic Partnership to Provide Mass Spectrometry Proteomics, Metabolomics, and Multi-omic Data Analysis Solutions”. Through this partnership Champions Oncology will leverage BGI’s mass spectrometry services in California to offer additional biomarker discovery and validation solution, and continue expanding their PDX bank with even more data sets. By partnering with each other, both BGI and Champions will be able to provide their customers with an efficient workflow from generating data, to analysis, and then to interpretation to address the needs of drug discovery and development projects. 

Another new innovation that Champions Oncology is working on is the Lumin Bioinformatics. According to their website, “Lumin is a revolutionary data interpretation software capable of analyzing proteomic, genomic and transcriptomic datasets in real time”. This software has the ability to provide scientists with additional understanding and awareness into the drug discovery. Champions Oncology plans for Lumin to continue integrating new data into the platform. Most recently, they integrated data from the Acute Myeloid Leukemia (AML) model along with cell surface and phospho-proteomic datasets. Essentially with Lumin, you will be able to upload your pharmacogenomic data onto this platform. Then, the software will be able to build signaling pathways and analyze the datasets. It can also determine clinical drug responses and PDX model responses. Using Lumin, you can also perform correlative and causative analysis on your data to further aid understanding. This platform has the potential to continue expanding to even more data such as machine learning models, plate maps and protein-protein interaction maps. All of these capabilities should radically accelerate the drug discovery process for clients, saving them time and money over more traditional discovery methods. 

Both the research and development industry and the data analytics/software industry are bright prospects for the future. By combining both of these together, there is so much growth potential for Champions Oncology and one can predict that they will continue growing and expanding in both markets. The innovations that they create will have the ability to transform the oncology market. 


Subscribe To The Rx Newsletter

sick economics

You understand that no content published on the Site constitutes a recommendation that any particular security, portfolio of securities, transaction or investment strategy is suitable for any specific person. You further understand that none of the bloggers, information providers, app providers, or their affiliates are advising you personally concerning the nature, potential, value or suitability of any particular security, portfolio of securities, transaction, investment strategy or other matter. To the extent that any of the content published on the Site may be deemed to be investment advice or recommendations in connection with a particular security, such information is impersonal and not tailored to the investment needs of any specific person. You understand that an investment in any security is subject to a number of risks, and that discussions of any security published on the Site will not contain a list or description of relevant risk factors.

The Site is not intended to provide tax, legal, insurance or investment advice, and nothing on the Site should be construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any security by Sick Economics or any third party. You alone are solely responsible for determining whether any investment, security or strategy, or any other product or service, is appropriate or suitable for you based on your investment objectives and personal and financial situation. You should consult an attorney or tax professional regarding your specific legal or tax situation.