VolitionRx Limited (VNRX) Earnings Call Transcript & Summary

Good morning, ladies and gentlemen, and thank you for standing by. Welcome to the VolitionRx Limited First Quarter 2020 Earnings Conference Call. [Operator Instructions]. This conference is being recorded today, May 8, 2020. I'd now like to turn the conference call over to Louise Batchelor, Chief Marketing and Communications Officer. Please go ahead.

Thank you, and welcome, everyone, to today's earnings conference call for VolitionRx Limited. This call will cover Volition's financial and operating results for the first quarter of 2020, along with a discussion of recent activities and key upcoming milestones. Following our prepared remarks, we will open the conference call to a question-and-answer session. Also on our call today is Mr. Cameron Reynolds, President and Chief Executive Officer; Mr. David Vanston, Chief Financial Officer; and Dr. Jake Micallef, Chief Scientific Officer. Before we begin, I'd like to remind everyone that some of the information discussed on this conference call will include forward-looking statements covered under the safe harbor provision of the Private Securities Litigation Reform Act of 1995. These statements are based on our beliefs as well as assumptions we have used based upon information currently available to us. Because these statements reflect our current views concerning future events, these statements involve risks, uncertainties and assumptions. Actual future results may vary significantly based on a number of factors that may cause the actual results or events to be materially different from future results, performance or achievements expressed or implied by these statements. We have identified various risk factors associated with our operations in our most recent annual report on Form 10-K, quarterly reports on Form 10-Q and other filings with the Securities and Exchange Commission. We do not undertake an obligation to update any forward-looking statements made during the course of this call. I'd now like to turn the call over to our President and Chief Executive Officer, Mr. Cameron Reynolds. Cameron?

Thank you, everyone, for joining Volition's conference call today. I especially appreciate it, given the busy earnings call season and the ongoing pandemic. Speaking of which, let me first start by addressing how the COVID-19 pandemic has affected operations for Volition thus far. During the first quarter of 2020, we implemented contingency planning to protect the health and well-being of our employees, with most employees working remotely where possible. Our lab in Belgium has remained open with the attendance of our dedicated laboratory technicians, who have kept our research and development work on track with our expectations. Many of our small and medium-sized studies have all already been collected and the samples stored at our on-site bio bank. So the trial work underway and planned for the first half of 2020 is still tracking expectations. Regarding our large-scale studies, both the colorectal cancer and lung cancer studies underway in Taiwan, are still ongoing with collections. However, the study collection in the U.S. with the EDRN has been paused during the pandemic. The overall timing impact of the EDRN collection bodes on the study is unknown at this stage. However, we'll provide an update once the study recommences. Unsurprisingly, we have taken the decision, given the current travel restrictions, to postpone our Capital Markets Day, originally planned for June 1 to later this year, most likely in September, and we will announce a new date as soon as possible. We hope to see many of you in person then. For the quarter ended March 31, we did not observe significant impact on our business operations due to the COVID pandemic. However, going forward, to the extent the pandemic continues and/or worsens, we cannot, at this time, predict the effects it may have on our company in the future. The key potential risks from the pandemic relates to the slowing of the supply chain of consumables and antibodies, and the delays in the provision of services by external contractors. We are working hard to mitigate any risks whilst continuing to protect the health of our team. I am truly proud of how hard the whole team has continued to work throughout these difficult times. My thanks to them and their families for so quickly adjusting to the situation. Our aim has been to continue to work at full speed to meet our current milestones. On the subject of COVID, after the quarter end, in mid-April, we announced that we are actively developing a COVID triage kit using our proprietary Nu.Q platform that aims to predict the likelihood that an individual, who is COVID positive, will develop complications and severe disease. The goal of this test is to provide early insight into which patients may require higher levels of monitoring, including hospitalization and critical care resources versus those who will not develop serious symptoms. Preliminary studies of patients with COVID infections are ongoing in hospitals in Belgium and Germany. While cancer remains our core focus disease wise, our existing Nu.Q epigenetics toolbox may have potential to help doctors and patients in the COVID pandemic or in future, respiratory viral outbreaks including pneumonia. We have filed a novel patent for the utilization of our Nu.Q epigenetics platform for the triaging of COVID-19 sufferers. This patent is also potentially useful going forward in many other respiratory infections such as the flu and pneumonia, given their similarities. I am delighted to announce today preliminary results from our first proof-of-concept study. In 84 patients, 34 of which were -- who were PCR positive for COVID-19 and 50 control subjects, Nu.Q cells were highly elevated in the PCR positive COVID subjects. The area under the curve, AUC, for single Nu.Q assay, was 98.7% PCR positive COVID versus control subjects with 100% sensitivity detection at 94% specificity. A second Nu.Q assay also showed promising results with an AUC of 86.2%. These top line results are hot off the press, so to speak, and further analysis of the data will be undertaken. However, I thought it important to share this initial news. I look forward to sharing further results of the trial and indeed other ongoing studies with the goal of developing a clinically useful product to help in the battle against COVID-19 global pandemic and potentially other diseases. I am delighted that the hard work to develop our Nu.Q platform is starting to pay dividends. For example, for the COVID trials, we could send our Nu.Q assays, knowing that they are robust, reproducible, and reliable to third-party labs and hospitals. This yet again shows the amazing potential range of usage of our epigenetics toolbox. As I'm sure you can imagine, our team has worked exceptionally hard to facilitate these studies in such a short period of time. And thanks once more to all of your efforts. But even given this additional work in the COVID-19 arena, I'm also happy to say that we have kept our momentum on our core focus of cancer diagnostics and have made significant progress this quarter on numerous fronts, particularly in assay and platform development and with our Nu.Q Capture program. Let me emphasize, we are apparently on track with the milestones detailed in the corporate deck made available on our website last month with further details provided on this call. Firstly, at the beginning of the year, we completed the acquisition of Octamer to expand our capabilities in epigenetics and further our goal of bringing all key components of our tests in-house. Secondly, our simple multi role plate format is expected to be [indiscernible] by the end of this quarter, quarter 2. Additionally, with regards to our fully automated magnetic bead based chemiluminescent format, we have now finalized 8 assays by the end of last quarter, which was our target, and studies are now ongoing for colorectal, lung and blood cancer with data readouts expected by the end of this quarter. In addition, I'm also delighted to announce today that we have also recently signed a contract with Shanghai Fosun Long March Medical Science Company, Fosun Long March, China, to further develop our Nu-Q magnetic particle based assays for use in Fosun's open access platform, moving out to an automated simulation immunoassay system. The agreement allows for the parties to negotiate an exclusive license agreement for Fosun Long March to distribute Volition Nu. tests for the [indiscernible] in China. This is very strong progress on our strategy to begin the process of international commercialization of our assays. I believe that we have made fantastic progress on all fronts, particularly given the challenging circumstances of recent months. Given the strength of our platform, we have also made strong progress on the veterinary front. We announced following the end of the first quarter, our initial data for Nu.Q Vet in a proof-of-concept study conducted by Texas A&M University, 1 of the world's leading Vet schools. At a specificity of 90%, a single Nu.Q Vet assay to take it over 70% of both canine blood and lymphoma cancers with an area under the curve of 84.5% and 83.1% versus healthy. These 2 cancers alone represent almost 1/3 of all canine cancers. These results give the team in Texas, confidence to move forward with other Nu.Q Vet assays in our pipeline and with a larger range of cohorts and trials that we have collected and that are planned. There is a video interview with associate professor Heather Wilson-Robles, who also served as Volition's veterinary Chief Medical Officer, on our website as well as the presentation deck focused on Volition's Vet Diagnostics, so please take a look for a more in depth analysis. It is exciting to see such strong results from our first Nu.Q Vet study conducted at Texas A&M University Veterinary Hospital. It is also interesting to note that the similar pattern of detection seen in both canine and human samples, confirming that the Nu.Q platform does appear to be useful in more than just human diagnostics. As with human diagnostics, there are currently no accurate, simple, affordable cancer screening tests available in the vet medicine market, and yet 25% of dogs will develop cancer at some stage in their life. Commercially, this is a significant opportunity. The U.S. is currently the largest vet market in the world with almost 70 million pet dogs and approximately 6 million cancers diagnosed each year in dogs, which is about 2.5x the number diagnosed in humans. Vet diagnostics has a clearly defined regulatory pathway via the USDA, requiring fewer and smaller clinical studies than the FDA processed human diagnostics, which generally allows a much faster route to revenue for vet product as compared to human products. I look forward to completing the planned trials and to launch our Nu.Q Vet product in the U.S. that we expect to occur this year. Looking ahead, I'm very happy to report that we have had 3 abstracts accepted for publication by ASCO, the American Society of Chemical Oncology, 1 of the world's biggest cancer conferences. Due to their strict rules, I cannot discuss these in detail today, but they're expected to be publicly released after market close on Wednesday, May 13, but please keep an eye out for these. For those of you who follow us closely, you will be well aware that it has been some time since we published data at conferences. Following the significant work on both the platform development and securing our IP, we expect the ASCO publications to be the first of many this year and are also planning to submit a number of clinical papers for publication throughout this year and beyond. We believe that now is the time to publish and show the validity of our Nu.Q platform in so many areas. In financial terms, we closed out the quarter with approximately $12 million in cash and equivalents. We continue to manage cash carefully and believe that we are in a solid position with regards to financial run rate to achieve our key 2020 milestones. Looking to the future, I would like to reiterate our vision and what makes us so excited with our progress and our [indiscernible]. Volition is an epigenetics company focused on advancing the science of epigenetics and exploiting these advances in human and animal health. This has been our mission since our founding and is coming to fruition with our Nu.Q platform at the very heart of epigenetics. So we say, the epigenetics is and, if not more, important than the DNA, the genetics. In short, it's not the DNA, it's the full chromosome. We believe the last decade of work at Volition with our ever-expanding team in epigenetics puts us in an extremely strong position with our expansive IP portfolio to be a significant player in this key field. Overall, on so many fronts, with our ever-growing team and IP, I'm delighted with the progress we are making, and I'm excited by the momentum we have developed in this epigenetics field. Indeed, our whole team is incredibly excited by the company's future opportunities. We aim to report throughout this year and beyond several key milestones, including Nu.Q's ability to detect a range of cancers in both human and animals, in addition to the clinical data of the Nu.Q Capture program and data relating to COVID-19 triage testing development. We are delighted to be working with our collaborators from around the world, all of whom have outstanding reputations and share our aim in improving early diagnosis of cancer and other diseases. I, along with the rest of the Board, and indeed the whole company, look forward to sharing the results of key studies over the coming months and year with our optimized platform. We expect 2020 to be our most exciting year yet. Thanks for joining the call today. I very much appreciate it, given the busy earnings call season and the pandemic. We're happy to take your questions now. Operator?

[Operator Instructions]. Our first question comes from the line of Mark Breidenbach with Oppenheimer.

You've got Matt on here for Mark. And Cameron, let me extend my congratulations on the recent progress. It's interesting proof-of-concept data in COVID. And I'm just wondering what you attribute to the high level of specificity? And also whether you believe the Nu.Q could discriminate COVID from other active infections, which may be increasing nucleosomes in blood perceivably?

Yes. Very good question. And yes, we were very surprised -- pleasantly surprised with the results that came through from this. This was just COVID versus normal controls. That was an exceptionally high result. And we're doing a lot of work now on the prognostic and the diagnostic process. Obviously, a lot of that includes other conditions, which would cause some of the nucleosomes to be raised. We're doing a lot of work on that. Actually, it's being run this week and through the next weeks. Our collaborators in Germany and Belgium are very excited with the results they've seen. We're measuring the body's response to the virus, and it's, in this case, in the NETs, the neutrophil extracellular traps. So we'll see -- all those questions will be answered, but we're just trying to be conservative at the moment. Just we're very excited with what we have. We'll be doing a lot of work reading out in the short to medium term, and we can answer all of those questions, but it was a very good result to start with and something we'll look very carefully at the diagnostic and prognostic value. But I think what's important to notice always in these areas is this is a COVID issue, but it's also the reaction the body has through the NETs. If it is useful in COVID, it would also be useful in pneumonia and the flu, which also have a very raised level of NETs and also kills people through a very similar mechanism. So we can help in this pandemic, hopefully, and we'll have that information soon. And if it works for that, it could work for a long time in the future as well through -- for the other mechanisms. So very exciting, but we'll give a full update once we know, and that shouldn't be very long.

Okay. Great. That makes sense. Yes. So now I guess, turning to the clinical-grade assays. It sounds like you have 8 now that have been validated. I'm just wondering whether you think eventually, you'll probably have to use different combinations of these assays based on the indication, whether it's lung or colorectal or other? And then if you could just give us an update when you plan to have finalized panels for the Taiwanese Lung trial and the EDRN study?

Yes. So we have 8 now. That's exactly right, and that's by far the most we've ever had in this stage, because we've been doing this now. So we're doing 3 or 4 more per quarter. So it's not just eight. We expect to have, again, 12 and then 16 by the end of the year. And you're right. So some of them are good in a range of different diseases and cancers. And we would expect some of them to be better and worse in different diseases and different cancers. So that's a process. Of course, the ones we're going for are the ones that have been shown to be differential in the tissue, because that's where we found them from. And I think it's also important to know that we're also looking for new biomarkers using the mass spec work in the Nu.Q Capture program. So there's a lot of evidence of different structures in different diseases and different cancers. And we've developed the assays for them, and we'll run them through the trials to confirm all of that. And we're also adding to that our new markets, which have not been shown before that we're discovering through Nu.Q Capture and the mass spec work. So very exciting. So we'll determine the panels. We are running the smaller populations now in the colorectal and lung, and we'll add to that the medium and large populations. So I would expect to have a very good indication -- or have them or have a very good indication this year for lung and colorectal, as we get more and more assays. But we've seen some, which work extremely well, and we're looking to be -- now that they are working well, we don't think we need a panel on 5 or 6 that we're hoping a panel of as little as 3 or 4 will work. So we're zeroing in on it. We're not there yet, but we'll have a lot more data once we can run 8, 10, 12 assays through the populations. All of which we've adapted to the platform, because they showed good utility in other things. So we're very hopeful. And it's -- don't forget, it's not just something which is a good assay, but doesn't correlate with the assays that currently working on something that detects differently. Otherwise, it's not additive. But we're extremely happy with how the development process is going. It's a lot of assays to have done in the last few months, particularly given the pandemic and all the other work. The team in Belgium has done a fantastic job. And it's not just a number of assays, which is important, and that's gone up a lot. But now it's extremely robust and reproducible, which has allowed us not only to progress the work very well in the lung and colorectal space, but also do the Vet and the Capture and now the COVID work, because it's all the same platform. So yes, it's been very good. So we'll -- yes, 8 assays, 4 more each quarter, and we'll have a lot of data coming up in the months, and we aim to get the panels picked this year.

And then maybe just one more, if I could squeeze it in. Do you still think you'll be able to have data from the Taiwanese Lung Trial at some point in the first half of this year? Or do you think given the pandemic that those time lines might shift?

I think it's a reasonable target, but if it slips it's only a few months, we're not -- we'll have data in the short term, short to medium term. We're reasonably on target, I think. It's never exactly sure with everything, but it's -- I'm not aware it's delayed now, it could be in the future, but we're sticking to the targets. It's coming up on us, for sure. The main delay was getting the assays developed on the platform. And now that we have a lot, we should have that data.

Our next question comes from Jason McCarthy with Maxim.

This is Michael Okunewitch on for Jason. So I'd like to see -- I have another follow-up question on the COVID test. And really, how do you transition this into the triage setting? Because based on the day you released, it seems to confirm that you guys can, in fact, detect nucleosomes being elevated in COVID with high accuracy. But then what do you need to determine in order for it to be applied to triaging patients?

Yes. So you're absolutely correct. So what we showed was COVID versus normal. So that's the first step. If you don't have that, you're not going to get anything in the triage. The next step is what we're doing now. We're getting a lot more samples with differential diagnosis and prognosis, those that have proceeded very well. Those have proceeded very badly into ICU and unfortunately, some deaths and how that relates to competing conditions and other things. So that's all in process now. What the aim is to see, so the body's reaction to the COVID is several fold, fever, antibodies, but also NETs, which are what we can detect with our assays, because it's chromogene based. It's the last line of defense, if you will. The body throws out -- the white cells throw out the NETs to trap the virus physically, which is a good defense mechanism. But like anything, if there's too much of it, it can cause a lot of problems. So we're getting very high signals in some of the COVID positives. We'll do analysis now to see what that's from. And if it is from the NETs and we can detect it, which is what we're looking to do, see how early we could have told someone that they're going to be getting into trouble from the coronavirus through the body's immune response, which is what we detect. Not the virus itself, but the body's response. And in this situation, it's the body's response, which actually causes the mortalities with the NETs, because it clogs up your lungs and some other organs, if there's too much of it. And if you think of it that way, like a fever. The body has fever, and it's good to kill the virus. If it kills the virus, but it can be too much and you can have too much immune response from the NETs. So we detect that, and we now show we can detect that in the COVID patients. So now what we've got to do is not just have plus or minus, but look through time points to see how early we could tell that someone is going to be in trouble. Because there's very -- it's very tough now to really know what that's going to be. So we think through our collaborators, it would be an extremely clinically useful product if we can show all of that. The first signs have been good from this, but we've got more work to do. But given the pandemic, it's a lot of work being done now and a lot of samples being collected. So it's something which we'll have in the short-term to see what the prognostic value is. And because of the robustness of our platform, as we said, we've got very reproducible, very robust assays. It's something if it did become a product, it could happen quite quickly. Things are being approved in very quick time, as you know. So we'll see. We've been very happy with the results so far, and we're really trying to see if we can help out on the prognostic side, and we'll move forward. But I think it's also important to notice that -- note that we're -- I mean, we're an epigenetics company, but our primary focus is also on all the cancer trials we're having in the Vet side and the Capture, which have been going incredibly well during this pandemic. But yes, it's very exciting. We'll see how the COVID side goes, and we should have more information soon.

All right. And then actually, to switch over to the Capture program. It seems like there's going to be a lot of data this year. And assuming that, that comes as expected for sequencing, immunoassay, mass spec data. Then once you have that, what are the next steps? I know that you're seeking some licensing opportunities for 2021. So could you give us a little bit of color on what those might look like? And where this technology is -- where you're looking to position this to be applied?

Yes. That's a very good question, Michael. So the Capture program, just for a quick refresher. We didn't discuss it a lot on this call, because we had so much else going on, but that has progressed very, very well as well. We'll have a lot more updates on that soon. But what we can tell you now before the updates, which will be soon. What it does is capture or pull out the nucleosomes preferentially from whatever structure we have the antibody for. So one big use for that is pulling out long from short nucleosomes, which short nucleosomes, 147 base pairs have been shown to be much more common in cancer. So you're looking to enrich with some with the nucleosomes, enrich the DNA and the nucleosomes from the cancer. That could obviously be very helpful in our assays if you can clear out some of the background noise, you always get a better result. And we think that could be extremely helpful in the sequencing business, because there's such a problem. They have a lot more problem with background than we do, because the nucleosomes are a lot more common than mutations in the DNA. So it can be extremely helpful, we think, either in a clean out step before our assays, and we're doing that work. We're also doing work on concentrating the DNA and sequencing, as you say. If we can show that we can concentrate the nucleosomes in the DNA, and that increases the validity of screening, that's a massive licensing opportunity for anyone in the space. And as I mentioned before, once you have the nucleosome, you can also do mass spectrometry, which in very simple terms, is you smash it apart and look exactly what was there. So it's an absolute proof as to what's on the nucleosome. And the mass spec work now can actually look down to the level of the histone modifications and the methylation levels on each histone modification is quite remarkable. So that's at the moment being used as a discovery tool for approving what we're looking for is there. Also looking for new markers that have not been shown, so very powerful. And in the future, potentially in 3, 4, 5 years down the road, it would be a great way to multiplex 4 or 5 different targets, because there's no specificity issues if you're actually looking at just the mass spec work. So how does that look? So we're doing the work now to see if it works well as a clear-out step in our assays. We'll have data on that soon. We're also doing work on the concentration of nucleosomes from known cancers to see if we can increase the concentration of the mutations for sequencing with the aim of making sequencing much quicker and easier for those companies. A lot of sequencing now goes to the 50,000x. We're seeing if we can do it with a lot lower coverage and therefore cost, which could be, as I'm sure you're aware, would be extremely helpful. So all of the work we've done on the assays has actually helped the Capture program immensely, because it's the same antibodies, the same work. It's actually -- and just for background, the actual capture is as much cost as one assay. It can be done on the machine. Because what you're doing is you have the antibodies on the magnetic beads, and then you pull it out with a magnet. So it really is still a very simple process. I mean it's taken a lot of work to work out and a lot of optimization is all our new intellectual property, which Dr. Micallef, who's on the line now, has been filing very -- a lot recently as well as all the way through about 10 years. It's extremely exciting. So it can be used in many ways, and we'll have a lot more information on that this year and soon.

And there's one more for me. It looks like there's going to be a lot of progress in 2020 of that moving forward towards the market, commercial prep for triage and a number of studies. So how should we look at expenses going forward? Should we anticipate the higher run rate that we saw in the first quarter to continue throughout the year? Or how should we look at that?

I think for the moment, we're actually tracking what our long-term target, which is $1.2 million, $1.3 million a month. If you look over the last 12 months, the first quarter is always higher, because we have D&O, and there's a lot of annual expenses that come out early in the year. And this quarter, we also had the Octamer purchase, which was obviously a one-off. So we may end up doing more work, but at the moment, we are tracking our twelve-month average. It is definitely lumpy between quarters for those reasons. But I don't think it's going to be raising a lot. And if it is, we'll update it next quarter. But certainly, for the summer months until the next quarter until we update, I think we're looking to track our long-term average.

Our next question comes from Bruce Jackson with Benchmark Company.

If you could just talk for a moment about the veterinary program. You brought out the proof-of-concept data. What work remains to be done with that program? Do you still think it's going to be the first product out the door? Is the commercialization strategy still going to be possibly as a lab-developed test? And then if you could also maybe, as a follow-up, run through the rank order of the pipeline in terms of how they might be launched?

Yes. Thanks, Bruce, good questions. And the Vet's a very important part of what we do and make sure it doesn't get lost in all the other news. So yes, the proof-of-concept data was very, very encouraging. And those cancers were picked by the Texas A&M Vet team, because they're very important, and it's about 1/3 of all dog cancers. So it was extremely good to see those results. And it actually mirrors what we know from those cancers in humans. So all in all, it's a really good validation of what we do by an independent group, and it's what we've been working for with robust, reliable assays. We ship them the assays, and we're working with great partners, who know what questions are needed in the Vet clinic. Obviously, we don't, and they do. So it's been a really good network and marriage of our 2 abilities. So yes -- so we've had the point of contact -- point-of-care data, and that was on plates. The plates were just shipped to them. That was the most simple format, as you know. They currently have an IDS stream, our magnetic bead platform, which will be operational soon. And then they can run -- we only have a few assays now on plates, which is why they have another few. We have as you heard, 8 now on the plates, some on the magnetic beads, and we're going to have a lot more soon. So they'll be running a lot of assays through a lot more samples. They have a lot more stored up. And for other cancers and trying to get bigger panels rather, I mean it was quite remarkable results just for those single assays, and that's what we had on the plates, but we have a very wide range now. And interestingly, we're also going to be doing the same work we did in humans on the Capture side, from the animal side, just to give us a lot more information and see how just for validation and also for the potential Vet market. So that will be coming through this year as well. And then the launches, yes, you're correct. With the first test, we aim to be as a lab-developed test. It's like a ClearLab. It's not -- because it's not humans, but they have their own lab there, which we visited in Texas, in their hospital. So that's the logical place to launch the test, and they can do that as soon as they're comfortable. They can launch it in their own lab, because they're obviously specialists, and it's there in lab, they can do like a Clearlab. And then we look to do a USDA product for the cancers, which worked very well. Launched a sort of a kit product that can truly shift around. So it's tracking very well. It's, again, eerily similar to what we've seen in humans, both in the preanalytics and how the assays perform. And I think we're starting to learn a lot both ways. You'll notice the blood cancer was the 1 which worked extremely well. One of the 2 that worked extremely well on the Vet side. And because of that, we started looking in humans in the blood cancers, and it's shown up incredibly well as well. So I think you will see a lot of cross pollination, not just going to the Vet side, but also starting to come back. And it's -- the rising tide is lifting all boats, because I think we spent the time really getting the platform absolutely robust, reproducible. It was a lot of work in the last 2.5 years, and there's been a lot of sweat from the team in Belgium, particularly, but it's really showing that we can really do a lot of different things. So yes, we'll see a lot more data. And Texas will start publishing quite aggressively like the rest of the company, because we've got a lot to say, and we're very, very happy with the platform. And our intellectual property in the Vet space as well as the human. So there'll be a lot happening in the vet space.

And then after we get the Vet tests launched, on the human side, which assay do you think is going to be the first one to reach the market?

So on the human side, well, we'll see if we do find something clinically useful in the COVID, it would pretty certainly be that. Because the approval processes are really shortened, because of the pandemic. But again, that's unknown, but we'll know, I think, in the short to medium term. If not, I think the most likely 1 is the triage, which will be [indiscernible] schedule for the end of next month. And we're running it through some triage trials. So far as the lung and colorectal, it's tough to tell. We're running medium to big trials in both of those. We'll see what's the clinical use and what's the panel, and which comes out from those. But we're doing a lot of work in both of those as well. And also, I think the highest results we have ever got in detection has actually been the blood cancers, which we had data on, which has also been good. So we're now working through what's the clinical question that's best answered and the trials for that. So the short answer is if we can find something clinically useful from COVID, it's likely to be the first. Because the assays are ready, and it's a very short approval process given the nature of the pandemic. Second to that, would be the triage, and on top of all that, we'd have the Vet side. And I think we haven't done a lot of work on the research kits in the last few months, because we've been so busy with everything else. But I think as we start to aggressively published, I wouldn't be surprised if that really started to pick up as well. I think there's a huge push now in the epigenetics space, and we really are at the heart of it. And I think we could -- we've shown really good efficacy now in cancer in humans and dogs. We've shown utility potentially very strongly in COVID. Collaborators are doing work in pregnancy preeclampsia, in lung diseases and other things. It's truly showing epigenetics to be incredibly important in a lot of different things. So there'll be a lot to talk about over the next 12 months.

Absolutely. Getting back to the COVID-19 data that you showed this morning, with the proof-of-concept data. Was that the NETs assay that you were referring to? Or was it another one? And then you said there were 2 Nu.Q assays that were being evaluated.

Yes. We're publishing and we're also patenting. So I won't mention, which 2 assays they were, but yes, 1 worked incredibly well in this aspect. And the other one, I mean 86 is still incredibly good AUC, and they do different things. So we've got a lot of work to do. Our collaborators are working in a lot of other markets as well for these same purposes in clicking trials. The same combination of how ours work, but different questions, prognostic as well as diagnostic. The PCR is a great test, as you know. It's very accurate, but it has its issues. So they're working to see how it can work in a lot of different ways. There's a lot of clinical questions now being thrown up, because of COVID beyond just the straight diagnostic question. And it appears very much that the NETs are a very big part of what does the damage to your body. And obviously, the NETs are very much related to chromatin, when it is chromatin that's spewed out. So that's what our assays appear. It's all cutting-edge now, so we'll publish that. I think there'll a lot of papers published in the future on how our assays can be determining all the NETs in the process. But we're working right now and we'll update a lot in the short term.

Our next question comes from Jason Kolbert with Dawson James.

Pretty good rundown, but I just want to pick up on some of the questions that have already been asked. When you talk about the COVID assay and detecting the NETs, my understanding of what you're saying is that you can detect what the body's immune response might be, and it might be a predictor of who's going to get into a cytokine storm that's going to result in potentially candidates for ventilators. And so it could be used as a prognostic to determine where there would be benefit for a viral knockdown like remdesivir. And if that interpretation is correct, I'm wondering whether there's discussions going on with therapeutic developers, so that they could use the assay prognostically to determine which candidates would be best for therapy and what the timing of that therapeutic intervention might be?

I'll give a quick answer, and then if Jake has anything more to add again, as our chief scientist. We're doing a lot of research, and I can't talk about it too much of it now, because, obviously, we're -- and some of its confidential to make it public in the process, but there's a lot going on, and I think we could be very helpful in the areas you mentioned. But will -- anything that we actually finalize, we'll announce once it's completed. Jake, do you have anything more to say on that?

Well, only that the work is ongoing. And if the assays do indeed turn out to be prognostic, then they could very well be used in the scenario that you described. We're not really at a stage where we can say that yet.

Okay. But that -- I mean, that's the true differentiator, right? Because there are a lot of good assays that will determine COVID presence, but there are very few assays that can determine magnitude and/or predict kind of the response. Because that's the whole game, right? There are a lot of people, who get COVID and have no symptoms. And there are other people that get into real trouble. So being able to delineate those 2, to me, seems like you have an incredibly differentiated product if that turns out to be the case. Is that how you're looking at it, too?

Absolutely. Exactly. But I think the nature of the size and potential is -- sorry.

That's exactly how we're looking at it, Yes. I was going to say that what we're measuring, although we get superb detection for COVID, that's not actually our goal at all. And what we are measuring, as Cameron was saying, is not the COVID itself, but the body's response to the COVID. And it is an over response and 1 aspect of that is the cytokine score storm. That is the cause of the complications, and it is that what we're measuring. And so we're very successfully measuring that and whether that is clinically useful in the way that you describe is something that we're investigating now.

Yes. I mean, we all understand the implication for that are huge. So have you had any early discussions or any contact with people on the COVID Task Force or NIAID or BARDA? I assume those channels are open to you.

Yes. We have been very active. We've been looking at this for several months. And given the size of the opportunity and how much we can help, we're just trying to be conservative until we're certain exactly what we can do. But all the things you described is exactly what we've looked to do. And we've been in communication with the authorities, as you mentioned in the U.S., as well as in Europe as well as in Asia. Because if you can have a prognostic, it's incredibly useful. And as you said, there's really nothing out there currently in this space. And as Jake has mentioned before, it's also potentially very useful in pneumonia and the flu, which cause millions of hospitalizations every year as well going forward.

Yes. So the same -- right with same kind of cytokine storm associated with it.

Exactly. Exactly.

That's really exciting. And on the veterinary side, and this is also on the human side, the ability to determine kind of the source of the cancer. Help me understand on the veterinary side, what the sequence of events are? A patient brings in their dog and the veterinarian either determines there's a GI related or other related tumor, but they may not know. Unlike a human, right, the dogs don't talk. So the ability to isolate back what type of cancer it is, how far advanced is the diagnostic library that will allow you to kind of link those two So what I'm -- the question I'm really asking is beyond detection, it's source and library matching, right? And of course, that has huge implications, not just for canines, but in ethical diagnostics too. And I just want to make sure I understand that connection.

So just a quick answer to that. I think it's probably good to hook you up with our Vet team, because no one on this call is a Vet expert, and that's why we work with Texas A&M, because they understand the clinic very well and the processes. So we've relied on them very heavily to tell us what clinical questions or what are the different cancers and what the clinical process would be for each of the -- and it's different from the vet hospitals to a vet lab to single vet hospitals. And they're working on that a lot. As for the epigenetics in the human space, Jake can go through that with you. But it's -- as we talk about a lot, there are a lot of epigenetic structures on the nucleosome, hundreds and hundreds and hundreds. There has a lot been shown to be different in different diseases and different cancers in the tissue, which is what we've been following. And now we're looking at our own markers through the mass spec commentary. But we thought the process we've gone through is that work has all been done by others on what targets to look for in the tissue. We've been really optimizing our platform to make sure we can measure all of those, which is what we've done and just coming through now. And now we're going to be using a lot of those assays to try to get the differences between the different cancers as well as just detecting the cancers themselves. And we've seen some differences -- well, there's a lot of similarities with some assays between the cancers, which makes sense. And there's a lot of -- we're looking now for assays in our growing library, which are differential between the cancers, which are definitely others. So we've got to work to work out a good panel to detect that cancer and also something which differentiates from other cancers and other competing conditions, which is also very important, of course. And that's the work which is ongoing now, which is why we'd like to have a lot of assays. So that we can really try to differentiate as well as just discriminate.

Right. So -- and the mass spec is really just an internal tool that helps you build the library. So that going forward on a volume basis, it just becomes a digital comparison, if you will. Is that correct?

Jake. You want to answer that?

Yes. The mass spec really has 2 uses. One is that we can look far and wide for which markers really are different on the nucleosomes in different cancers as opposed to looking in what other people have found in the literature in tissue. We can really investigate what's different in the blood as you say, a discovery tool. And the second possibility, and at this stage, it's very, very early. But in the future, it could in itself become a diagnostic tool where instead of looking at a panel of 3 or 4 nucleosomes and to see whether that panel is characteristic of lung cancer or colorectal cancer and so on, we could conceivably be looking at a panel of 1,000 or even 100s. And at this point in time, it's far too early to say that what we can or would do such a thing. But in principle, that's possible, and it's all covered by our intellectual properties.

Right. Well, I'm just thinking in terms of throughput, right? It's hard to have throughput when you involve a mass spec. So I'm just for now, what I'm doing is I'm compartmentalizing the mass spec as kind of the internal research tool to help build the library.

[indiscernible] but also confirm markers that we say are there from the antibodies and the recombinant controls are also definitely there. So it's confirmatory as well as exploratory. Yes for the next foreseeable future, that's absolutely correct.

Okay. And just I want to close, and I know Michael Okunewitch mentioned this, but I just wanted to make sure I have a handle on the time lines for Nu.Q. There's so much going on, but if what I understand you're saying is that we should be looking for more incremental data throughout the rest of the year. Triage next month, lung and the colorectal study and then some of the hematological assays towards the end of the year. Is that right?

Yes. And if you look at the presentation we have, on Slide 6 and 7, there's all the targets for all the different areas from the assays, the trials, the Vet and the Capture. There's 2 pages of them just to be accurate if you want to refer to that. We've kept that up to date.

Really, really professional breakdown. Thank you very much. I'm excited to see as the platform and the company matures, particularly given COVID. I mean this really has the potential to kind of, in the words of our President, be a game changer. So it is exciting.

Our next question comes from Nathan Weinstein with Aegis Capital.

So if perhaps you could just remind us about the Octamer acquisition that you closed early in the quarter. And what was exciting to you guys about that? And then has integration turned out as expected?

Actually, it's funny. We planned this, obviously, in the last few quarters of last year. We got to know Dr. Schonberg quite well from our Science Advisory Board and part of having a very robust platform was having a very good control, which is the recombinant nucleosomes. And there are very few people in the world, who can make them well. It's a very cutting-edge and very new, but it's a really key part of the level of robustness that we currently have. So we've thought about this a lot, and we want to control our entire supply chain, which given what's happened since then, it certainly wasn't what we predicted. But it's been very helpful to be having the key components that we have under our control. So the main purpose of it all was to inherit that company's ability to make recombinant nucleosomes, which is to control all the things we do in the Vet assays, in the human assays, in the Capture program and everything -- and the antibodies. Octamer makes excellent nucleosomes, and we've been consuming them. So part of licensing, we're doing our own products, obviously, but a big part of what we want to do going forward is licensing. Because there's no way if epigenetics is a tenth of as a widespread as it seems to be to us in its applicability, we're not going to be able to do it all as a small company or even a medium company. So we'll start licensing. And we've always had the vision to license, but if we can license where we grant the rights to use our intellectual property, which we have a huge amount of now, but also provide the consumables, the nucleosomes and the antibodies. We can keep a good track of how much someone is using, and therefore, how much product they're making. And also stop copies from coming around, because we can tag the antibodies and the nucleosomes. So it is a very good strategy and our antibodies had actually come to -- sorry, nucleosomes had come through Shanghai, which would have been tough, obviously, in the early days of the pandemic. That would have shut down. So it was actually very lucky we did it when we did. It's been a very good process. We have not been aggressively marketing them during the pandemic, mainly because we've been very busy making a lot of nucleosomes for ourselves. Obviously, in all these programs, we've been wanting to do the integration. So we can understand how to make the nucleosomes and really develop them ourselves beyond the team in Munich doing it. We're looking to bring as much of that back into our headquarters in Belgium. So that's gone a pace. And we will switch from the integration and making things for ourselves, to start actively marketing the nucleosomes. Because the ones made by Octamer and by us now are very good, and we're learning to mass produce them. And mass producing them and tagging them means you bring the cost down a lot, and it also means you can control the supply chain and also control what you give to other people in licensing. So a very key aspect of what we do, and we are thinking big that this could become a very big piece of the epigenetics market. So we're trying to make sure we've thought of all the things that we need to do, and this is a key part of it.

And then perhaps just 1 more for me. If we think about the supply chain that leads to your assay, just any disruption there from COVID? And just in good times, does that tend to be a lot of vendors and easy to supply -- to get the supply that you need?

So the fantastic thing with our process, unlike sequencing and all the other things circulating tumor cells, it's actually -- I mean, it's been a lot of work, but it's very simple in its heart. It's the antibodies and the nucleosome controls on magnetic beads, which are made by dozens of companies. So we aim to be manufacturing in our facility the key components for when we start producing products and licensing ourselves. There are some supply chain issues, because, obviously, we're looking at dozens and dozens and dozens of nucleosome targets. So we don't manufacture our nucleosome until we've got some utility and develop our own antibodies. So we have been -- we still buy some antibodies. We still buy a range of things from different groups. So as I said, there have been some of those that have been held up a bit. We've typically, as part of what we do, try to find at least 2 or 3 suppliers for all key components. So that we're not clogged up. But there have been some disruptions. So things have been coming slower and there's been like it was everyone in this crisis, but it hasn't had a major impact on operations, because we're doing a lot more ourselves. And we've tried to have a few different suppliers. And eventually, things do -- it has been a bit slower during this crisis, but suppliers do tend to supply even if it is a bit late. So we'll be trying to think ahead and order larger amounts in the areas where we're not producing ourselves.

[Operator Instructions]. Our next question comes from the line of Anita Dushyanth with Zacks Investment Research.

Congratulations on the progress. I just have a couple of questions also on the COVID in the veterinary space. Just to have a better understanding of how the COVID product would go through the regulatory path. Could you discuss the next steps what you're doing there? And also, considering this pandemic could subside temporarily, and there is a talk that there is a possibility of recurrence maybe a couple of times later in the season. How do you sort of expect to roll out this into the market? Maybe there is some lumpiness in certain quarters and then it's kind of slow later.

Yes, absolutely. So the next steps, we're doing a lot more clinical work. So the assays, as we've seen discriminate extremely well between COVID and normal patients. Now we're going through serial samples from the same people to see what the outcome was and how early we could predict that outcomes, obviously. And we have some very good clinical partners, who have collected samples for this for a lot of different questions including that. So well, the next step is to see where the discrimination we found could be useful, along the lines that we've talked about. So that's all in process. And they're collecting a lot and now that we've had very good proof-of-concept data, they're getting keener and keener, obviously, because as Jason mentioned earlier, it's potentially a massive use to the clinic if we can show what we're looking to show. So they've been extremely helpful and quick in getting us samples and running. So these are not being run ourselves. We don't run an infectious lab. So we cannot -- we don't have any protection for our staff to be running them. So these are all being run in the hospitals where the COVID is being treated and detected. So we've been shipping them kits. So again, it shows the robustness of what we do. The fact that we can ship kits and they can run them. It, otherwise, would be very difficult to have done it ourselves, because we don't run a lab that can run infectious samples. So the next steps to see the value in all the things we're looking at. If we can find something that is useful, we will look to launch a product in the clinic. In Europe, that will mean a CE mark, which are getting approved quite quickly now. That depends again what platform we use. We have the very simple plate format, which has its uses. And we also have the magnetic beads, which can be adapted to many platforms, including 1 of the ones which we have in Europe and the 1 we're working with Fosun on in China. And that will become obvious once we know if there's a good clinical utility. And then, yes, there are -- I mean the COVID does have the potential to wax and wane for the foreseeable future until there's a vaccine. So we'll see how that goes. But also, don't forget the same NETs mechanism is very common to a lot of other diseases, which are very common in normal times, pneumonia and influenza outbreaks. So I think if we can show clinical utility, there could well be a strong utility going forward. And there are millions and millions of people hospitalized every year from those as well. So I think it's the same platform. It's the same assay. So we're seeing where we can help. But I think that will all become obvious once we see what the clinical utility is, and we can give a good timeline and plan for all of that once we know, but we're very actively working on it.

Right. That was helpful. And regarding the veterinary space, does the -- hemangiosarcoma and the lymphoma, are they specific to certain breeds in the canines And are you also looking at the detection in other animals?

Yes. So dog cancers are a little different from humans so far as because of the inter-breeding. I guess, strictly, types of dogs are very inbred. So they are much more prone to specific cancers. So yes -- I won't go through the breeds, because that's a Vet question, but they're very specific. So a lot of cancers in a lot of different breeds of dogs, it's very common to get 1 particular type of cancer. Often over half the cancers in a particular breed are 1 particular cancer because of the inbreeding. So it's something which is actually quite breed specific, which is actually very helpful. Because then you -- if you know you have cancer and it's a certain breed, you can have a very good guess at what sort of cancer it is. And that's, again, issues, which -- the reason we've used Vet school to do all this work is there's obviously some very specific knowledge there, which is not in -- currently in Volition, but very much in Volition Veterinary in Texas. So they targeted cancers which are very common in the breeds they see a lot and very common in dogs overall. So that it could be very clinically useful. And that's why they chose the cancers, which we looked at. And it's extremely encouraging to see the discrimination that we did so early in the program. This was really the first shot at it, and it was very encouraging. As far as other animals go, anything with DNA has a very similar nucleosome. So we've had preliminary discussions on a range of other animals, but we thought the Nu.Q Vet process, let's go through dogs, launch the first products, and then we'll look at the other animals. But the most obvious ones are cats, obviously. There's obviously some agricultural and zoological uses as well, but that's really a next-year story while we get dogs through the process and then add other animals on. But there's -- if we launch successful products in the dog space, there's no reason to think we couldn't do in a wide range of other animals. Because they all have the same problems. They all get cancer, and they all have the same nucleosomes. So it's something which has a potential, very large value through all those areas. But that's something we'd really start to look to license out even from the vet subsidiary, because there's a lot of work in all of those things, but it would be the same platform. So it could be done very quickly with groups that are very specialists in those other animals. And that will all be in the process in the future.

And I presume that you're -- possibly after launching this by the end of the year, you're looking at other cancers in dogs as well?

That's correct. They've collected, in Texas, a range of different cancers in different dogs. And so the process forward is not just more assays in these cancers, which obviously would be helpful. It's good if you can have a panel of 2 or 3, which is even better than these. Then obviously, each assay doesn't cost a lot or take a lot of blood. So you add more assays if you can, get better discrimination. So they're in the process of doing that and also the process of looking at other cancers. And we expect some data on that in the short to medium term. And then you do bigger trials and launch products in those as you get them. Yes, it's very important to remember how common cancer is in dogs and how dire the current situation is in detection of cancer in dogs. Because, as Jason mentioned earlier, it's very tough to ask a dog questions. It's very tough to scan an animal, because they move. They won't stay still, obviously. And human proteins don't work in animals for obvious reasons. So it's an even more dire situation in diagnostics of animals than in humans. So potentially a very, very big opportunity and 1 that we're very happy with the partnership we have with Texas A&M, because they really know what they're doing in the Vet space. And we're providing the assays and know-how from the epigenetic side, and they're providing the veterinary knowledge. So it's a very good union.

Yes. Yes. And lastly, regarding the cancer studies that are going on in the human population. So geographically also, the population is exposed to different types of cancer. So do you plan to sort of license and partner in different regions?

Yes, absolutely. So very good question. So we want to become experts in epigenetics and the assays and intellectual property. We're launching our own products, because we think we can do that with what we have and the trials we're collecting. But I think it's going to be -- the epigenetic space is going to be far too big for 1 company to launch products in all those areas. As I mentioned, all the different cancers, there's a lot of other diseases are showing a lot of big epigenic component even COVID, which is a virus, because of the immune response. So I think this can be very, very important in a lot of areas. So the first revenue will come from our own products. And -- but I think we aim to layer in more and more licensing. And key to that is keeping control of the key components ourselves, which we can sell and also keep control of to really ascertain what's the volume of sales from the licensees. So we're building it all up for our first products, but also to be very aggressively licensing. And I think the licensing will become a bigger and bigger and bigger share of what we do, as it becomes so widely applicable in a lot of areas as we expect. And so we'll launch the first few products and then really aggressively license.

We have no additional questions at this time. So I'd like to pass the floor back over to management for any additional concluding comments.

Thank you very much for coming on the call today. I know it's a difficult time for everybody, and we really appreciate your interest at this very difficult pandemic time. And I really look forward to all the milestones for the rest -- for the next few months and the few quarters. And I look forward to speaking to you on the next earnings call. Thank you.

Ladies and gentlemen, this does conclude today's teleconference. Once again, we thank you for your participation, and you may disconnect your lines at this time.