VolitionRx Limited (VNRX) Earnings Call Transcript & Summary

Good morning, ladies and gentlemen, and thank you for standing by. Welcome to VolitionRx Limited Second Quarter 2020 Earnings Conference Call. [Operator Instructions] This conference call is being recorded, August 14, 2020. I'd now like to turn the conference over to Scott Powell, Executive Vice President of Investor Relations. Please go ahead.

Thank you, and welcome, everyone, to today's earnings conference call for VolitionRx Limited. This call will cover VolitionRx's financial and operating results for the second quarter of 2020, along with a discussion of our 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 are Mr. Cameron Reynolds, President and Chief Executive Officer; and Mr. David Vanston, Chief Financial 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 provisions 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 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 us first start with an update on how the COVID-19 pandemic has affected operations for Volition thus far. I would like to reiterate how proud I am with the way that our team has adapted to the different world we find ourselves in and kept working at full speed during this whole time. Their fantastic efforts have put us in an excellent position as we move towards the launch of our first products expected later this year. During the first quarter of 2020, we implemented continuously planning to protect the health and well-being of our employees, with most employees working remotely where possible. However, in addition to our remote efforts, our lab in Belgium has remained open, thus far, with the attendance of our dedicated lab technicians, social distancing and observing other safety protocols in our large 20,000-square-foot facility. As the pandemic continued into the second quarter, and indeed, looks like it could continue for the indeterminate future, we focused on 2 key areas to try to mitigate the effects of the lockdowns and allow us to keep moving towards our first products, utilizing our cutting-edge Nu.Q platform. Firstly, and very importantly, we significantly strengthened our balance sheet through both an underwritten public offering of our common stock and through the sale of shares of common stock pursuant to our existing aftermarket offering program, to ensure we have sufficient capital to work on our many programs concurrently and launch products where still possible during the pandemic. More on our much strengthened cash position and our product launch strategy later. Secondly, we have increased the flexibility of our supply chain through the addition of a second supply of key materials for our products, and we're looking to the future in manufacturing those materials ourselves by bringing all key components in-house. To this end, I'm very happy to announce today, we have just submitted an offer to purchase a neighboring facility in Belgium known as Silver One. We expect that this will be the production hub of all of our products and components to both secure our own supply at a lower cost and to drive reagent revenue building on our purchase of OPTIMA earlier this year. More on this later as well. And so I will start with the all-important strengthened financials. We closed out the second quarter with $21.3 million in cash and cash equivalents compared with $12 million at the end of last quarter, the March quarter. In addition to this, during the second quarter of 2020, we raised $13.8 million in gross proceeds in an underwritten public offering, which was especially pleasing given the challenges posed by the pandemic and the volatile stock market. During the quarter, we also periodically sold shares of our common stock pursuant to our previously disclosed at-the-market equity offering program, or ATM, under our existing registration segment, along with our Rule 10b5-1 plan. Through the end of the second quarter of 2020, we had raised approximately $1.6 million in gross proceeds under the ATM. And subsequent to the quarter end, throughout August 7, we raised an additional, approximately $4.7 million gross proceeds through the ATM. The ATM has been in place since late 2018 and provides for the offer and sale of our common stock having an aggregate offering price of up to $10 million from time to time through Oppenheimer & Company acting as our agent and/or principal. We decided to use the ATM now to further strengthen our balance sheet during the uncertain times fueled by the pandemic and support our goal of launching several products over the next few quarters. I would like yet again to thank our investors for their strong support. Our underwritten public offering that we completed in May was oversubscribed, and we welcome some new investors as well as many existing ones. We're also delighted in June to be added to the Russell 3000 and Russell Microcap Indexes, a great step forward for our company. I think it is fair to say all this activity significantly strengthened our cash position, providing a great runway to achieve our many milestones and give us flexibility during the continued pandemic. We continue to manage our expenditures very carefully. And as we approach commercialization, our burn rate has picked up to approximately $1.6 million to $1.7 million per month, which we expect to continue as we make additional investments towards product launches. The increase is mainly due to the acceleration of our asset development, the purchase of commercial samples for clinical evaluation of assays and securing resources in both people and facilities to launch multiple products worldwide, and so to some of our achievements this quarter. I'm incredibly proud of the work we've done to date. Indeed, much of it was in the June quarter regarding the development of a potential COVID-19 triage prognostic tests. If we succeed in launching this test, we expect that it could not only be very helpful in the fight against COVID-19, but could also prove useful for many years to come in a wide range of other respiratory viral outbreaks, including influenza and pneumonia, since our test measures the body's immune response rather than targeting the actual virus itself. It was only just a few months ago, in April, when we announced that we had filed a novel patent and a proof-of-concept study started. And yet by July, we had reported results from 2 clinical studies, just to recap. The preliminary study results reported in May demonstrated the Area Under the Curve for a single assay with an accuracy of 98.7 PCR positive versus controlled subjects with 100% sensitivity at 94% specificity. And a second Nu.Q assay also showed promising results with an accuracy AUC of 86.2%. To date, we have now tested 2 independent cohorts of COVID-19-positive patients with quantitative nucleosome immunoassays and found the nucleosomes were highly elevated in plasma of severe COVID patients relative to healthy control subjects. And more importantly, that both histone 3.1 variants and citrullinated nucleosomes increased with disease severity. Given that the highest level of nucleosomes were found in patients requiring artificial ventilation or extracorporeal oxidation, we believe that nucleosomes could serve as a guiding biomarker for disease severity in COVID-19 positive patients. These data imply that Nu.Q could have strong prognostic potential, and so we are now focused on the completion of larger longitudinal studies that were needed to support a potential COVID-19 product launch. Our collaborators have submitted this data for peer review, and we look forward to its publication. Early identification and triaging of patient tested positive for COVID-19, who are the most likely deteriorate and need critical care, would enable both improved outcomes for patients and a more efficient use of critical care resources for health care providers, as we believe this is still very much an unmet need worldwide in sizing the impact of the pandemic. Our goal is to develop a prognostic test with nucleosomes as a biomarker to provide early insight into which COVID-19-positive patients require higher levels of monitoring and hospitalization and critical care resources versus those who less likely developed serious symptoms. I would like to make it extremely clear, while cancer remains our core disease focus, these results demonstrate the versatility of the Nu.Q platform and the range of applications for which these products can be leveraged to help increase diagnostic power. I'm hopeful that our Nu.Q epigenetic toolbox may have potential to help doctors and patients in the pandemic and believe they may also be helpful in other respiratory viral outbreaks, including influenza and pneumonia, particularly given that the current COVID tests are specific to strain or disease, which our Nu.Q tests are not. It appears very likely that the hyperinflammatory response to the virus involving massive injection of NETs made up of nucleosomes into the blood by white blood cells that damage the lung and [ kill ] so many patients also do in influenza every year. Consequently, we believe that if our test works well work for COVID, it should also work for influenza and pneumonia and ongoing and massive potential worldwide market. I'm also pleased that the Nu.Q test kits used by the teams in Liège, Munich performed extremely well independently on their own lab equipment. This bodes very well for use of the kits in any future lab setting and yet again is testament to the robustness and usability of the Nu.Q platform our team has spent many years optimizing. As many of you know, the healthcare world, pharmaceuticals, diagnostics, et cetera, moved fairly slowly. And so I'm particularly grateful to our team and most importantly, our collaborators that have worked so quickly and so diligently on these studies and indeed in preparing the groundwork for longitudinal studies to get underway this quarter. In terms of launching our COVID-19 product in the U.S., we are currently in discussions with a major U.S. contract research organization to conduct a large prospective prognostic COVID-19 study. The study will be intended to satisfy all requirements to apply for an FDA emergency use authorization, EUA. If EUA is no longer an option upon study completion, it will be designed to also satisfy all requirements to submit a traditional FDA 510(k) De Novo application. In addition to the regulatory approvals, the study will be designed to maximize the likelihood of receiving funding awards from the Biomedical Advanced Research and Development Authority, BARDA; Operation Warp Speed, OWS; and/or the Coalition for Epidemic Preparedness Innovations, CEPI. These programs were funding to accelerate development, manufacturing and distribution of COVID-19 products. If this study were to proceed and positive results received, then a product receiving EUA can only be ordered for COVID-19 patients. However, longer term, a product commercialized via EUA, the emergency use authorization, can be used in a post-market 510(k) studies to expand to many other clinical uses. For example, a subsequent 510(k) will be filed for use in COVID-19 plus influenza. More broad intended use 510(k) claims could also be subsequently filed, for example, for use in infectious diseases and hyperimmune reactions with associated [ indiscernible]. So the study would represent a great first step. I look forward to announcing further details of this study as soon as we can. I also hope to announce soon further details of other COVID-19 longitudinal studies currently being planned in Europe for European CE mark approval. If we continue to see positive results in these longitudinal studies, we aim to have a CE-marked product available on multiple platforms beginning at the end of this year. And we look to launch a low-cost product that could be used in any laboratory worldwide as soon as possible thereafter. And we're also looking to launch in Asia soon after Europe. In addition to all of our hard work on the COVID-19 triage product development, I'm delighted to say that we have continued to make strong progress in our other programs, again, despite a lot of new hurdles that we are facing during the pandemic. From an assay development point of view, we have now 13 assays developed as of June 30, and this meets our target of 12 assays by June 30, and are being tested in our clinical research programs. We plan to reach a total of 20 assays by the end of this year. And this is yet another milestones we have reached. This is a huge step for us, and we have kept this key milestone despite the pandemic conditions. These assays can now be used in our key Marquee cancer diagnostic programs, our vet studies and our COVID work discussed earlier. We have also manufactured our first recombinant nucleosomes in-house with a plan for further 4 to be completed by the end of this month and 3 in September. These nucleosomes will be used in our assay development program in-house and may also be sold as research-use only to biotech and pharma companies to be used as readouts for the therapy monitoring and personalized medicines, for example. We have also made great progress with our point-of-care platform, something which could be particularly useful in both the veterinary market and for the COVID triage. From the large cancer clinical trials perspective, our Marquee trials, I think it is fair to say that the various ways that we have now been affected by the continued pandemic, either by slower or paused collection or a host of other supply chain or travel and communication issues. We believe we have successfully managed those areas under our direct control, such as the assay development and running samples, both on track with our milestones, but many issues are obviously beyond our control. The EDRN study in the U.S. has been impacted the most by the pandemic. Further through our last update, remote, at home or off-site; [ contending ] has been IRB approved and is expected to begin this month. This approach limits potential exposure to COVID-19 and will help enhance enrollment, but we do not expect that will match the standard system numbers. Most institutions participating the study are reopening, but with various degrees of restrictions and barriers. A new site in Australia was opened and was initially enrolling at full capacity, but now Australia has recently reimplemented lockdown restrictions. EDRN is currently seeking to add additional sites outside of the U.S. in regions with fewer restrictions. But to date, none of these sites are collecting. So in summary, the EDRN expects lower collections in 2020 than originally planned, and we expect that this trial may be extended. As always, I will update with further details once available. The collection of both large-scale studies at the National Taiwan University continues with the aim to complete collection by middle of next year. With regards to those studies, we have now completed 8 assays on the subsets of both of the 2 National Taiwan University studies, CRC in lung, and we're working with our collaborators on data and analysis. We expect over this coming quarter to run additional number of assays. As per our more rigorous process for processing data where we can, in either peer-reviewed papers or conferences, the plan is to submit abstracts to 2 upcoming conferences, the [ APDW ] in December for the colorectal counts results and the IASLC for lung cancer results now planned to be held in January. And finally, from a clinical study perspective, we are at the final stages of planning some additional clinical studies, including non-Hodgkin's lymphoma as well as colorectal cancer and lung to watch this space. We have generated a lot of data in our Nu.Q Capture program this quarter with the aim of submitting a clinical paper with our filings by the end of the third quarter, but just one [indiscernible]. Through mass spectrometry, we have made fantastic progress by identifying and then developing a Nu.Q biomarker from scratch, so it can now be used in one of our clinical programs. This was simply our best quarter ever from a publication's point of view as well. We had 3 abstracts published at ASCO, the American Society for Clinical Oncology; and we have also just received acceptance for oral presentations for 2 abstracts at the now virtual Veterinary Cancer Society meeting in October of this year. As I alluded to earlier, abstracts are underway for both colorectal cancer and lung cancer for the APDW and IASLC, respectively. Clinical paper wise, a Nu.Q vet paper regarding pre-analytics has been submitted for peer review and accepted for publication. Three papers have been submitted by collaborators for lung disease, for complications during pregnancy and for COVID-19 using our technology, yet again showing the wide adaptability of our platform. We have 3 more papers in process, a pre-analytic paper for humans due for submission over the summer months and 2 papers from the Nu.Q Capture program on mass spectrometry and also for sequencing. Now that we are very comfortable with our IP and our robust stable platform, we are aggressively moving to publish all our and our collaborators' very wide-ranging work. Please continue to watch this space, and so to the future. Firstly, I'm delighted to announce on the call today that we have an accepted offer to purchase Silver One, a 10,000-square-foot facility on the same science park as our lab in Belgium, which will be our manufacturing hub and service lab. Our offer has been accepted, and both parties are now completing the necessary paperwork. This facility comes at a cost of under EUR 1 million, including a full new fit-out, showing our commitment to both us keeping our costs down and moving to the product phase of development. We anticipate that as with our previous real estate transactions, at least some of these costs will be supported through nondilutive grants and/or loans from other regions. We expect that the fit-out will take place over the next few months, and we hope it will be operational in October and produce several key components right away with full ISO certifications next year. Our plan is to produce, at large scale, raw materials such as recombinant nucleosomes, which act as the caliber to our Nu.Q assays in addition to antibodies that are key elements to our branded products, and indeed we'll manufacture our full diagnostic kits once finalized. We expect to offer all elements for both commercial sales and for clinical trial purposes and CE-marked products for sale in Europe and beyond. We also intend to install a service lab in the new facility, which would undertake sample processing for external parties such as the pregnancy samples processed as a service for NIMs, as mentioned on an earlier call. The opening of this new facility would not only bring manufacturing of key components in-house, thereby securing our supply chain, it would also significantly reduce the cost of production of any of these elements and in turn, would reduce the cost of assay development. It's an exciting time, and I could not be happier that we could find a suitable site so closely situated to our current lab. It's another great step forward in our road to a diverse revenue stream. To that end, we're recruiting a sales and business development manager to help drive revenue through research-use-only kits, through service propositions and through CE-marked products. I look forward to announcing an appointment soon. More broadly, as we approach commercialization of our product, be that COVID-19 triage test or one of the cancers, lung, [ breast ] and colorectal cancer triage products, we have commenced licensing discussions with a range of companies and platform providers to ensure we can supply the market quickly and cost effectively. Our first triage CE mark is due to be completed in the next few weeks, being delayed from late June as our suppliers facility was halted due to several key members being put on COVID-19 quarantine. Given our new in-house capabilities, giving us greater flexibility, we have now brought the final work in-house and under our direct control. This yet again shows the benefit of our focus on diversity of supply and having an in-house production option. Product-wise, we remain on track to launch our first Nu.Q vet product later this year. We feel the vet market is one where we have the best chance of launching products during the pandemic. The use of our vet products due to be launched at the end of this year are likely to be for blood and lymphoma remission monitoring. And we then aim to target additional uses, remission monitoring for other cancers and for diagnosis itself in 2021. The [ tax ] and Vet team have made great strides forward despite the pandemic As I said earlier, 2 abstracts have been accepted for oral presentation at the VCS meeting, where we expect further Nu.Q data to be presented. In line with our product focus, Mike Guidry, formerly Volition Vets CEO, will shift his focus purely to commercialization and serve as Volition Vets Chief Commercialization Officer. We have made fantastic progress on the vet side of the business, and this is truly an area of the business to watch closely. I could not be prouder of how hard the whole team has continued to work throughout this difficult time. My thanks to them and their families as they're quickly adjusting to the new normal. Thanks also to our collaborators and suppliers throughout the world. The impact of the pandemic has been felt everywhere, and so we are grateful for their can-do attitude. Our thanks also should go out to the financial community and our investors. We have greatly appreciated your support and have significantly strengthened our balance sheet in order to deliver our future milestones and our first products. Looking to the future, I'd like to reiterate our vision and what makes us so excited with our progress and our space. 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 it's coming to fruition with our Nu.Q platform at the very heart of epigenetics. So we'd say the epigenetics is as, if not more important, than the genetics for DNA. In short, it's not DNA, it's the full chromosomes. 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 our intellectual property, I'm delighted with the progress we are making. And I'm excited by the momentum we have developed in the epigenetics field. Indeed, our whole team is incredibly excited about 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 clinical data on the Nu.Q capture and data relating to the COVID-19 triage test in development. We will also focus on driving revenue in the coming quarters, where possible, during the pandemic in our 4 key areas. Firstly, our 4 potential triage tests; secondly, vet products; thirdly, using our new production facility to drive reagent sales and revenue; and four, the licensing of our technology for other [indiscernible] to commercialize. I, along with the rest of the Board and indeed, the whole company, look forward to sharing the results of our key studies over the coming months and year with our optimized platform. Despite the pandemic, 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. We are now happy to take your questions. Operator?

[Operator Instructions] Our first question is from Jason McCarthy with Maxim Group.

This is Michael Okunewitch on the line for Jason. So first off, I'd like to see if you could provide a bit more detail on the upcoming CE Mark. You said it's expected on a maximum side, I think you said. So which triage has that for more? And is it just for a single assay?

Yes. It is a triage product. It's the blood cancer as actually blood cancers in humans and in the [indiscernible] have been actually best results for anything. So as we announced, ASCO, we had excellent data. So we thought it's a very good way of starting the CE Mark process to help launch the products, and that's actually [indiscernible], which also works well in a lot of other things. So I guess that will start [indiscernible] finished in June. But obviously, one of our suppliers had some major COVID issues, so we brought it back in-house. So it appears very soon to be finished in the next few weeks. So let's say, September, and that will restart the process. So once we have a CE Mark product, we can work with it in the blood cancers, but also where that is as useful in other areas. It makes it much easier to CE Mark it for other purposes. And yes, it's also the assay, which was also very valuable in COVID. So it gives us a huge head start in a range of different areas. The triage product itself, we're doing some pre-analytical work, which actually is being done in Australia, which obviously has gone back into lockdown. So we haven't updated exactly when we'll start marketing other products, but we will have to CE Mark for it quite soon, and that gives us a really good building block for a lot of other products. So it's a great start.

All right. And then -- so actually, relating to the blood cancer product, how many assays would you need to get a CE Mark before you have an actual product to bring to market?

So the one assay actually works quite well as a frontliner or a triage or a direct adjunct, if you look at the results presented at ASCO, the single assay actually was in the 80s and 90s, AUC wise. So I think it's getting quite close. So we're doing a lot more work on the blood cancers. It actually -- as you can probably tell, it's caught us by surprise how good it's been and how it works in a range of different species so quickly. So we're doing a lot of work now on what the product would look like. So obviously, the CE Mark was cancer healthy, which is incredibly impressive, but we need to make better trials to make. What if CE Mark allows you to do, you fill it commercially. It doesn't mean people are going to rush out and buy it. But by CE marking the product that is when you run it in trials, it gets its product very immediately. So H3.1 by itself had incredibly good results in the blood cancers. And once we finish to pay analytics, whenever that is, given the COVID work we're doing because of the pandemic, we'll see if that's a good-enough assay as a triage by itself. It's good enough for CE Mark, we'll see what the take-up is commercially. But the results, as you can see from the ASCO work, and I can share them again offline, we're incredibly impressive for that one assay by itself in the blood cancers versus healthy. So it's a good first step. but we haven't talked about a lot in the call because we're not exactly sure on the process. We're putting all the pieces together now as regards to products in different areas. But yes, we're CE Marking it because the results are absolutely fantastic as presented to ASCO for that one assay. But obviously, the more assays you put together, the more accurate typically. So we're working out now. But it seems like a very good step forward. Given this is an assay we've been using in a lot of different areas to make so that it's product ready.

And then just one more on the COVID-19 test. I'd like if you could help frame exactly how this would be applied impact. I think you mentioned that it will be largely focused on the high-risk groups, but what's the need out there for prognostic indicators? And then what do physicians do with the information once they get it?

Yes, very good question. So people, I've got prognostic and diagnostics a little confusing, for nonclinicians. A diagnostic tells if you have it, a prognostic tells you what -- attempts to tell you whether you're going to be badly off -- you're probably familiar, a lot of people have very low or no symptoms. And unfortunately, some people get extremely bad symptoms. Now the symptoms you get are actually the body's immune response, it's not the virus itself at all. It's the immune response, which is the nets, which is something we'll be looking at for a long time because it's long trails of nucleosomes, which the body throws out to try and track the virus, which is why it's cold in there. I guess that's why -- they came with the [ equity ] in backwards, I guess, so in the process on net. So what we measure is chromosomes, and it's a long train of chromosomes. So a very simple product for us and potentially -- because it's very low cost, easy to use, something to be used very widely. So how do we use it clinically? So if unfortunately, Mike, you were in hospital with COVID, you go when you feeling a bit sick. It's very hard to tell now whether you're going to spiral down into intensive care quickly or whether you stay sick for a while or you get sick and recover or you'll recover and come back again. So what's lacking is a prognostic market actually to tell you where you are in that cycle. So what we looked at is a 3-stage process. We're in the third stage now, and the first 2 are extremely successful. [indiscernible] measure COVID from healthy is COVID positive. Otherwise, it's not worth having any test, and it was extremely -- I mean, way beyond our expectations of almost 99% accuracy. Then is it worse, is it higher in very sick people? And for the sake of time when the sample is collected, we took proxies. So those in intensive care, who seem the most sick, which makes sense. Those who had COVID in a normal ward as medium and those who had COVID but didn't know it were -- or just tested positive but weren't really sick for low symptoms. And I think that all makes perfect sense. And in the paper, which you'll see soon, the people with -- in intensive care were absolutely off the scale high and particularly those who are on the path to death or ventilation, unfortunately. And the people who were sick, but moderately sick in normal wards. And those -- so that's what it means when it says progressed with disease progression. And these are numbers we've never seen in the counts. I mean just off the scale high. Obviously, if you're drowning in NETosis, which is a tragic cause of death of so many people from COVID, you are -- you have a massive signal in our nucleosomes, which is understandable. So it's two things. So the next level of trial is in the same people. What does the curve look like from when you come in, feeling okay, see if you're getting better or worse. But also, doctors need something to quantify. To put it very simply, if 2 people, Mike, I'm not sure or Michael, I'm not sure who is who, one of you might come in and think I'm dying, I'm dying, I'm very sick and actually be okay. And one of you might be saying I'm okay, but actually, he's very sick. The doctors always want something to quantify where they are in NETosis, which there really isn't at the moment. So we think if it can be proven, it's incredibly important to have a prognostic. Also, if there's ever a therapy for COVID, it is the doses which kills you, not the virus. So knowing if you're getting better, you need a prognostic as well to see is a marker going down with treatment. So -- and don't forget that means it's not taken once, it's taken time and time and time and time and time again. So if it is 1 -- the H3.1, again, that's the one we're seeing marking for the blood cancers. Now of course, you're not going to be screened for cancer while you're hospitals of NETosis certainly then, and a completely different signal size wise. It all fits together very well. So you need a lot of them. If it's only one assay, [indiscernible], very little to manufacturer with our new facilities. Now that we're in the process of manufacturing all ourselves, we can bring down by about 90%, 95%, the cost of that one assay or [ this explanation ] also worked very well. I won't go to that too much in depth. It's quite technical, but it's useful as in having 2 markets for different reasons and different measures of information. But it looks like it could work just with 1, perhaps 2. Now the 1 -- if it is just 1, it's something which we can launch extremely quickly because by that stage, we strongly expect you'll already be seeing that for a different purpose, which is one of the reasons we were so keen to see market quickly for the other purpose. So I look at it together, and I think it's showing several things. These trials, we rushed through intellectual property. We got it out there with the information we had. We rushed kits to independent centers. They ran the kits. Now we tried this a few years ago with other collaborators, and the kits really didn't have the robustness needed. This time, I'm extremely proud to say that they were incredibly reproducibly, reliable. They measured exactly what they should be measuring. The standard of care is perfect. The -- it was just -- they work exactly the way independently in separate hospitals. And of course, because of COVID, we couldn't travel there and train anyone. It just shows that the bump down in the lives that people can run and get data quickly and launch. So I was extremely happy for a whole lot of reasons. It just shows that the rising part of our platform, [indiscernible] it's reproducible, reliable and incredibly impressive for all the work we've done. So yes, so to be used in that prognostic sense, and we're working on trials in Europe, which can be retrospective, therefore we can get data quite quickly. We're hoping to run the first of them in September, which is coming up quickly now. And then the U.S. trial, I mentioned, obviously, we'll give full details. We've decided in the U.S., given its potential uses for years and years to come in influenza and pneumonia to go for a proper CRO trial, not try to kind of rush samples here and samples there. So we'll give some new information as soon as we have it. But we're very keen to do a proper CRO FDA study for this in the U.S., and we'll update on that. So we expect to see data on products for the European market, and we're hiring a sales team now to see once we have that, so we move quickly. And as I said, it can be done on plates, on beds and the point-of-care products, we're working on very heavily too, potentially also just to drop the blood on the screen. And it could also be used -- also tantalizingly with a COVID test. If you put the COVID test on the point of care, you're going to have a diagnostic and a prognostic on the same test point. So all that's very exciting, and we're working very hard on it.

Our next question is from Mark Breidenbach with Oppenheimer & Company.

Cameron, I guess we're used to getting updates on the progress with converting your assays to commercial-grade formats. And I guess, I'm still trying to understand why getting 20 assays is a meaningful milestone given that most of your products would likely just use maybe 1 or 2 or 3 Nu.Qs on the panel. Why do we need 20? And what's really the rate limiting step now since you have so many commercial grade assays ready to go, what's really the rate limiting step for moving diagnostic panels forward?

That's a very good question. So yes, the simple panels, the 1, 2 or 3 ones are the triage panels. So that's why we're very keen to launch products as soon as we can. I mean the NET results have been amazing, and the vets just with 1 or 2 and in COVID just with 1 or 2. So that's why I think during the pandemic, we can launch them the way they are. So we did -- we always had targets to launch more assays on the plates and it just took a lot of work. I guess when the CVs are as good as they could be, we're looking at 15%, we're down to a [ few percent ] now. During the standard curves and all the work, I mean there's hundreds and hundreds of experiments per assay to make sure it's completely robust. Now don't forget we're getting to a standard, not just so we can run it or someone who know runs it, but anyone can run it anywhere, which I think has shown to be incredibly true now in the facilities in Europe where we run in. So we now -- so having a wide range of assays to run in the trials works because each one -- I mean, as you know, there are 1,000 structures on the nucleosomes or more, including really very things like histone modifications, methylation, [indiscernible], phosphorylation, ubiquitination and -- well, there's huge, I won't go through them all, I just know the process. It's huge. And we've never really managed to get a reliable test. Now don't forget the importance would be from plates, we had some working on plates, which worked okay. But the issue in serum was that there was a lot of background signal. The actual signal in plasma is very, very pure, and it's a much better signal to noise. But we really need to be on Vet to get there. So we took on a specialist on the Vet platform and the RDF platform. [ Mohammed ], he has done an amazing job and he had another fantastic team member who's really pulled their way tremendously during the pandemic. So the difference is, and I think this is probably the most important step in your question. So January, February, we could see perhaps things closing up. So we bought smaller quantities of the antibodies to do the work to adapt them to the platform. You need 3, 4, 5 [ megs ] depending on what you are to do. The reiteration is to make sure you get the standard curves in the process. And I think we have a team of 5 doing nothing else but assay platform relevant to this, I mean. It's a huge amount of work. And it's hundreds of experiments per assay to get us really, really, really to the level it should be. But for then the trial, for example, if you are -- and some of the assays -- typically what happens is a range of them work quite well and a few very well and some not at all, but you want to run a lot of them through a bigger population because just the ones that work very well, don't necessary work well in panels because they correlate with the other ones. So typically, you want to run lots of those, a couple -- as you know, we have not picked the panel yet. So there's still a good 8 or 10 candidates for each of the candidates to see what's best for the panel because it's not just the ones that work best, it's what works best in the panel, including competing conditions, everything else. But for example, for [indiscernible], the amount of antibody you need for 10 of them times 5,000 samples is actually quite large, which normally would be trivial. I mean getting antibodies typically is tough. But over the last 3 or 4 months, everyone's really stopped manufacturing new antibodies. So we've stuck through -- we thought during all this, let's stick to things we can definitely produce in large quantities, things like H3.1 citrullination where we have a good access to everything and launched the products where it's very easy to run. Again, the vet, COVID, the triage products whereas data has been absolutely excellent on just a couple of assays. So in the meantime, we're developing as many assays as we can to give ourselves as many bullets in the gun, make sure we get as good a panel as we can. And it's just the way it is at the moment, EDRN study is paused. Everyone says, well, when's it going to be restarted? You can probably tell me it's better there than it is in the states when things are going to go back to normal, I was wrong. I thought maybe a month or 2 ago, we'd be heading back to normality, and it's not so -- it's very hard to give exact time lines when the study is going to be finished for the assays because it's all kind of up in the air. And just patching things with Taiwan, we haven't been there for 8 months now so a lot of triage products, for example, you have to do a lot of co analysis. It's not just the assays. It's in conjunction with the low-dose CT scan. And I don't know if you know about lung cancer, but there's a lot of different variables. So we've had to deal with all of that. But I think the team has done incredibly well, controlling what we can, which is assay development, and launching the products that only really do take a [ small ] on their assays, which we can control. And we'll just be ready for the colorectal side as soon as it all lists, and when a list will have a huge range of assays. And a lot of them, we expect to be able to manufacture large volumes of the antibodies and then control it ourselves. So it's all really well-tuned. That's the short answer.

Our next question is from Bruce Jackson with The Benchmark Company.

With the COVID-19 launch studies, if I could get some additional detail. So I take it, there are -- there's a study in Europe, and then there's going to be a study in the United States. And the study in Europe, it was unclear from the press release whether you had longitudinal data or not or whether you're about to start the study or it's in process. Can you give us like the status of the European study? And then how many months of longitudinal data are you trying to get? And then with the U.S. study, when do you think you might start that study? And how long do you think it might take?

Good question. So initially, this -- the short answer is all of those. So we have some longitudinal later, which was encouraging. Obviously, if you go from low to medium to high, there is a curve between them. But we can't probably say what that looks like until you have quite a few of them. So you need quite a few people, and we're working on the numbers now to ensure we have 50 or 100 to really try and be sure of what the curve looks like in between the different groups. The definite has occurred. We've just got to see what that looks like. So we have run some longitudinal data. We've got working with one institutions that we already have, who have collected what appears to be enough for a trial and the CE Mark was positive. But like everything, you have to go through an ethical process -- an ethics process. And running them, it's not months of longitudinal data. Typically, COVID actually does kind of reach a conclusion one way or the other in a week or 2, so they already have been collected. So it's -- I mean the actual -- the samples that are collected running them doesn't take very much time. But as you've seen from this last paper, when you're working with true upper institutions, it takes months just to kind of all package it up, and everyone agree. In this last paper, there are 12 offers and 4 institutions. So they love the data in their team, but it's getting everyone to kind of agree on what should be said and how it should be published, and we're trying to publish everything now, obviously. So it takes some time. So the short answer is the longitudinal studies are actually only a week or 2 per person. So it's not [indiscernible] for months. Typically, the first CE Mark launch there are enough levels, we think. I mean that's determined by statistics once you see how it works, but it looks to be good from what we have. And we're looking for a few different sources in Europe beyond what we have. So we'll have updates on that. On the West side, we've done a lot of work, trying to do a study. Of course, you can try to kind of do small studies and sneak it through where you can do a big front door study with a big CRO, [ Dr. Terrell Jason ], who I think you know quite well, has done a lot of work for us on that. And we'll see. I think we're getting close to what we want to do, that does take time. I don't have the final time lines, it won't drop, but it will be something in the at least 6 to 12 months in the U.S. I mean it doesn't take that long to collect, but when you add everything now it takes time. It just does. But we're very comfortable spending that because I don't think anyone is certain that the epidemic will be over -- pandemic will be over. And also, anything we do, I think, is extremely helpful going forward in regards to pneumonia and influenza, which kill millions of people every year and things like diabetes. So it's not a COVID product, it's a NETosis product. So we took the decision in Europe to apply the CE Mark soon as we can. And I think it's close all this year to have the product in the CE Mark [indiscernible]. And in the U.S., we decided to do a proper CRO study of the time lines and things. We'll do as quickly as we can. Well, again, this is why we strengthened our balance sheet to make sure we have the money to do it properly and get it done by a proper CRO. And so we'd apply to EUA and 510(k) as well and obviously, work with BARDA and operational [indiscernible] and all those things as well. So I think Europe will be much quicker, but the U.S. study will be as a goal-favored flavor as we can to make sure it's a properly done FDA product that we can really hang our head on.

Okay. And then turning over to the National Taiwan University studies, you mentioned that you've completed 8 of the Nu.Q markers. Is the plan to do all 20 as they become available? And...

Yes, so just -- continue.

Yes. No, go ahead.

So yes, so we have subsets of the 2 of them. So they're not, as I was talking to Mark from OpCo, given supply chain issues and all those assays, we have limited quantities we can run. Running 5,000, 7,000 is actually a lot of work in 8 assays. Normally, it would be more trivial because you have complete supply chains and everything in 6 months, now everything is starting to dry up a bit. Again, that's why we're doing a lot of our own work now to guarantee all of that in large volumes. So yes, we run 8 assays. We absolutely -- we're going to run all 20 because we have the large volume of sample there. They're currently good collaborators and I'd like to just, again, thank them for have continued on collecting during this time period. So we will be ready. When we're ready, they'll be ready. And when the pandemic's over, I mean they're collecting very -- we've actually [ bucked ] their schedule, which is amazing. So we've split off subsets to run the subsets of our assays. And we don't publish subsets of subsets, we publish when we have a big package of enough samples and enough assays over, as I said, as soon as we can, which is probably at one of the conferences. But also the conferences are moving timing now and going virtual and everything's kind of moving around. So I'd like to say, they're working incredibly hard, collecting and we're working incredibly hard getting the assays ready. And we put together and we'll be very happy to release the results as soon as it's all kind of put together.

Our next question is from Nathan Weinstein with Aegis Capital.

I'd like to ask on the veterinary health side, if you don't mind, if you could just share, first of all, what's exciting to you about that market, just seeing us all on the commercialization front, it seems like it could be more in the near term? And also, what does like a plan commercialization look like in that market?

I think it's, in the near, good to focus on the vet as well as everything else. So what we love about the vet market, actually, a few things. During the pandemic, only a couple of assays have got very good results in very important dog cancers. So tick, we can launch product on a reasonably simple given the current supply chains. You only need to do hundreds -- a few hundreds of dog samples to get a product out there. So tick, at the moment, we don't have to run 10,000 trials, where no one can travel and the supply chains are really all messed up. And the market itself is absolutely phenomenally big. I mean there's 2.5x more dogs diagnosed every year with cancer than humans, given their short life cycles. And it is something which we take very good care about. They're like our friends. So we could charge a very similar price to the given diagnostics. Also the collaborators, Texas A&M, I mean what a remarkable effort they've done during the pandemic to continue on with the work. Dr. Rosen Rob, who has been absolute star in keeping things going and intellectual curiosity to accept what we do and understand it and adapt it to the debt market. They're one of the world's very best vet school. So we're incredibly lucky to be working with them. It's not something we would have do unless we had a great partner because we're not vet people at all. So that's continued on. It's -- the data has been good enough. They're comfortable, they think they can launch product this year. And it's something which you continue to just launch more and more products because there's a range of vet cancers, there's a range of animals and the market is controlled by a few different companies in the U.S. So tremendous licensing opportunities as well launching our product. So I think it couldn't -- be better for us right at the moment. It's a simple product. It's small numbers of samples getting the product. It's a massive lead. It's a great partner. And it's certainly something we can do during a pandemic. So let's tick them before someone closes -- the university closes. But at the moment, it's on track, and I couldn't be happier with the work they've been doing.

Our next question is from Steven Ralston with Zacks.

If we could get a little more granular on your 2 lead products that are closest to commercialization. You mentioned, thanks to Bruce's question, that you're looking at doing these studies in Europe. The size of the sample, you mentioned in the 50 to 100 range of subjects. Is that sufficient for the CE mark?

Yes, sorry, that's subjects, but don't forget the serial sample, so you'd have 5 or 10 samples from each person. And you would add to that, we've done a few hundreds in other populations as well versus healthy. And so you typically don't have thousands of serial samples because -- well you have thousands of tapes, but from only 100 people longitudinally. I would add to that other sales that we have to be -- so I was talking 50 to 100 where you followed the individual person to show the curb, but to show that actually works in different groups and the process is also a very good background work. So I'd expect to be in a lot more than that. And again, that's up to us. We have a CE Marking team now that understand what's required in the process which we have in-house. But it would be hundreds and hundreds and hundreds of samples from hundreds of different people. And again, it just comes down to the intensive use and what's available, and then you could add a lot more healthy to it to, get better specificity. I was talking about the COVID side of it, but you'd add probably quite a few hundred other healthy people. So you'd be looking at least 400 or 500 samples, I think, as a minimum to where you want to be. But that's a question for our -- I'm not a CE mark specialist, but we have a lot of people in that boat. But it has been loosened to fit during COVID because obviously, everyone's in a hurry to get a product out there. But we're very confident with what we're looking at. We would -- for our CE mark, that would be enough to get the CE mark and not just get the CE mark, but something which people would be interested in buying given the numbers we have.

You mentioned you were going to use some of the same data from the second proof-of-concept study. How many subjects were in that study?

In that, we had 142.

And how much of that data can be used in the -- along the...

That will be part of the product. [indiscernible]. The actual papers themselves and the products have been driven by clinicians. I'm not -- actually obviously you know from the paper or the process. But we have a strong team, marking team internally. And as you can probably -- as you'd be able to tell them the paper public, There's a dozen different clinicians on the -- doing the work for us. So we're getting extremely good advice from what's going to be needed from all those areas for that. The final numbers, we're still working on them, but there will be -- we're not going to do it, obviously, unless it's enough to satisfy all of the requirements, not only to get a CE mark, but also to be marketable. And we're confident from -- we want to make sure it's multiple centers as well. So -- but yes, that's not my specialty, but we do have very good people doing that. So I'm very confident when we go ahead, it will be on a very solid basis.

Moving over to the Nu.Q vet. That's currently in the hands of Texas A&M College of Veterinary Medicine. And from what I understand, there's a study either ongoing or going to be started that you just mentioned, we're going to have a few hundred subjects. Where exactly in that process are you?

So they've collected the range of different samples. They've got some biobanks. Obviously, the collecting has gone -- slowed a bit from dogs coming in from a whole lot of reasons. So they've gone to quite a few other big biobanks. So as far as I'm are aware, and I'm pretty aware, they have enough in what's happening there to do the products which are -- for the first product, which is the monitoring for lymphoma and the blood cancers. So what they have currently is enough to launch the first products they're talking about, which is why they're confident of doing it this year, but they're also expanding as widely as possible with biobank samples as well as many life samples as they can. So that's going to be submitting a lot of papers now on the pre-analytics. So they've done all the work. The assay are stable, the samples are stable with the pre-analytics, that, I think, have been accepted now. So that should be very soon. And they're presenting a lot more data at the conference in October, which would be supporting all the work they're doing. So most of them last week, they're still very confident of meeting the time lines. I mean that can change if there's an outbreak of COVID or things have shutdown. But at the moment, they're on target for that. They have samples. The data has been good for the products, and they're presenting the data in papers in the conferences now. So at the moment, it's all seems to go on target.

And last question. You closed in the acquisition of Octamer in January. And looking at their website, they have some pretty hefty price point. I'm wondering when the sale -- their sales will start flowing through your income statement.

Yes. That's exactly right. So we -- obviously, that hit right as COVID did when we were -- so what the aim has always been to absorb that team into the Belgium team. So it's now Volotion Germany from Optimum. And yes, potentially, this is why we're very keen on reagent sales being 1 of the 4 key areas to drive revenue because nucleosomes, you can sell for a few million a gram. So obviously, that could be nice if you sell grams. That's not a prediction. That's just what they go for. That people do smaller amounts then get up to it. So we focused in the March, April, May sort of time frame in developing our own capabilities. And as I mentioned in the scripts, we can now manufacture quite a few of the nucleosomes ourselves. But it was pretty obvious to try to do all of that in the same facility as the development and wasn't going to be what we needed, which is why we have been intend. It looks like we are purchasing Silver One with a 10,000 square foot, and we'll move some team members in there. So given all the problems in supply chains, we focused not on external sales in the last few months, we focused on doing what we need for our H3.1 launch, for the CE Mark, for the COVID, for the [indiscernible], and that's the assays, which we've been developing that the recombinants are for. So that's going very well. And now that we're moving in, we expect and be able to move into the new facility in October. We'll put our attention much more to not just doing stuff for ourselves and secure our supply chain but as you said, there were some -- Octamer did make some sales, is overcoming nucleosomes and other things in Octamer. So we're in the process now of hiring, but -- and also we're not really a sales team from that area. We're in place of engineering sales manager to manage the process of the antibodies, the controls, the kits. And I think there's also a strong market for contract research organization, which will be the same facility. The ability to profile nucleosomes is useful for a lot of other people, and no one else has the ability to do it. So the people ship the samples, which is what we did with NIMs, which was the revenue we reported last year. I think that's got potential legs as well. So the short answer is it was obviously affected by COVID. So we focus on ourselves in the last few months to make sure our programs were valid. And now we're focusing on new facilities. So then we can, I guess, say walk-in through them at the same time. We can make nucleosomes for ourselves as well as start selling them. So I'd expect we'd really start aggressively doing that in the new facilities with the new sales manager later this year. And I'd expect to see some sales picking up all the way through next year. Because being at the heart of epigenetics, we make fantastic components, we think. And I think there's going to be others who want them as well. So we expect to see that 1 of the 4 revenue streams coming through next year as well.

We've reached the end of our question-and-answer session. I would like to turn the conference back over to Cameron for closing remarks.

Thank you, everyone. I know it's a very busy time. I really appreciate your interest in Volition, and I look forward to updating you throughout this quarter as we have a lot of milestones coming up and on the next Q in November. Thanks a lot for your time. Goodbye.

Thank you, everyone, for joining us today for VolitionRx Limited Second Quarter 2020 Conference Call. We appreciate your interest in Volition and look forward to speaking to you again in the near future. Goodbye.