VolitionRx Limited (VNRX) Earnings Call Transcript & Summary

Joining us next out of Austin, Texas, is a multinational epigenetics company, developing simple, easy-to-use, cost-effective blood tests to help diagnose a range of cancers and other diseases. At this time, I'd like to introduce VolitionRx.

Hello, everyone, and welcome to the VolitionRx Conference Presentation. Thank you all for joining today. I'm Scott Powell, I'm the Head of Investor Relations and the U.S. Chief Financial Officer for Volition. Hopefully, all of you can see the slides, I'll point you to our disclaimer slide. And just to remind you, I'll be making some forward-looking statements during this presentation. For those of you who don't know Volition, our mission is simple. We want to save lives. A little financial snapshot there and a little bit about Volition. We are a diagnostics company, we are developing blood tests to screen, primarily for different cancers, but also for a range of other diseases. And I'll start with the one that probably interests most people. And that is our blood test for COVID-19. Now this is not intended to be a blood test to screen for COVID-19. This is intended to be a triage or risk stratification blood test after a person has tested positive for COVID-19. So the issue that a lot of doctors and nurses have right now is after a person test positive for the coronavirus, the doctors and nurses really don't have any way to determine whether or not that patient is likely to develop the severe symptoms of the coronavirus or the mild or moderate symptoms. And basically, the patients, the doctors, the nurses have to wait for that person to become highly symptomatic before that person then starts to get hospital or medical resources. And a lot of times, it's too late, right, a person may be at home and maybe suffering for a couple of days with severe symptoms before that person actually goes to the doctor's office or the hospital, before that person starts to get various therapies or drugs or before that person can get medical attention. And sometimes a lot of the damage has been done already by the time that patient finally gets the medical resources. So it would be -- it will be a much preferable way if that after a person tests positive for the virus, they would immediately have a Volition COVID-19 blood test that could then tell the doctor whether or not that patient is likely to develop the severe symptoms of the coronavirus or the mild or moderate symptoms. And that's exactly what we're trying to develop. So if a person has potentially been exposed to the coronavirus, that person goes in for COVID-19 test, test result comes back positive. The idea is that they would immediately be given a Volition blood test for COVID-19. And if the blood test came back with a very high level of nucleosomes and/or Neutrophil Extracellular Traps, or NETs, in a person's blood, we've shown in our prior clinical data that, that's indicative of a person likely to develop very high -- very severe symptoms of the coronavirus, and then that person would then be able to get the hospital or medical resources needed ideally prior to the onset of those severe symptoms. So what we've shown thus far -- you can see on this slide, what we've shown thus far is we were able to differentiate between people with the coronavirus and people who do not have the virus. And then in our second study, as you can see here, we saw that nucleosomes were highly elevated in the plasma of severe COVID-19 patients. And that's an indicator of high levels of Neutrophil Extracellular Traps being injected by person's white blood cells into their bloodstream to fight invading viruses. So we showed a very strong correlation between quantities of nucleosomes and citrullinated nucleosomes -- I'm sorry, the citrullinated nucleosomes are the ones that are indicative of high levels of Neutrophil Extracellular Traps and those patients with the highest levels of nucleosomes and -- of total nucleosomes and citrullinated nucleosomes were also the patients experiencing the most severe symptoms of the coronavirus. What we are organizing now is we're organizing longitudinal studies to determine just how far in advance, if at all, of the onset of severe symptoms do we see high levels of nucleosomes in the blood of patients and high levels of citrullinated nucleosomes. And we're hopeful that these nucleosomes, both the quantity and the presence of citrullinated nucleosomes, we're hopeful that those show up in advance the onset of severe symptoms. And if that's the case, and that's what we're hoping to show, and that's what we're organizing now through these longitudinal studies. If we can show that, then this could be a very useful prognostic tool because we will be able to identify persons who are likely to develop the severe symptoms, but have not yet begun experiencing the severe symptoms of the coronavirus and get them the medical resources that they need. So that would improve patient outcomes, number one. Number two, it would also better utilize hospital resources so that those most in need of medical resources for those that could be ventilators, oxygen, intubation, hospitalization, et cetera, are actually getting those medical resources. So we will have further announcements on our COVID-19 product, and we're very hopeful and very excited about this potential product for us. I will talk about our other clinical work and some of the studies that we're doing in cancer. You can see some of the 2020 milestones here on this slide, and you can see some of the further milestones coming here. And this PowerPoint is also on our website. Most of you know us as a company developing blood tests for various cancer types. That is still the case, of course. If we look at colorectal cancer, which has been in our program for many years, with this particular cancer type there -- let me go back to Slide 18. With most cancers, you can see that most cancers are not screened for by using blood tests. You'll see on the right here, you can see that most cancers are screened through X-rays, mammographies, scans, biopsies, colonoscopies, very few blood tests. It's really the only blood test that's in common use as a front-line screen for any cancer type is the PSA for prostate cancer. You can see on the left here, a lot of other diseases are screened for through blood test: diabetes, cardiovascular function, kidney, thyroid liver, reproductive, HIV, hepatitis and inflammatory disease. But very few cancers are currently screened frontline through blood tests. We hope to change that because blood is a, I think, as most of us would admit, is a very convenient modality. Blood is a bodily fluid that we tend to give pretty regularly and frequently. Many, if not most of us have had a variety of blood tests over the years for a lot of these diseases here on the left. If you look here on the right, with cancer, a lot of these current screens suffer from various limitations. Some are very expensive, some of these scans are very expensive. Biopsies are very expensive. They're invasive, by definition, colonoscopy is invasive. Many of these have risks. Some of the scans and X-rays, subject to patient to radiation, which, of course, isn't good. Biopsies and colonoscopies are invasive. Therefore, there's always a risk of infection, internal bleeding, so on and so forth. With colorectal cancer, it's an interesting screening paradigm. We actually have a very good screen. As you saw on the prior slide, the colonoscopy is the preferred modality and the most common screen in the United States for colorectal cancer. But a colonoscopy, of course, is expensive, is invasive, it's not without risk, requires a significant amount of prep, a day, maybe 1.5 days out of work. The patient often undergoes general local anesthesia, which sometimes has negative side effects. So for those reasons, you can see some of the information here on this slide. 1/3 of adults have never been screened. So that's a U.S. statistic. So around 35% of Americans, even though they're eligible to have a colonoscopy, have not had one. You can see on this second bubble here in the center. The U.S. Preventative Services Task Force recommends that CRC screening can help lives and offering patients, different test options, substantially increases adherence. The colonoscopy is highly accurate. It's about 95% sensitive, which means it only has about a 5% false negative rate. The issue is, as I mentioned earlier, the cost, the invasiveness, the entire amount of work, those reasons lead a lot of people not to complete their colonoscopy procedure. And this is a big problem. Colorectal cancer is generally a slow-growing cancer. If you go in for your first colonoscopy, the American Cancer Society now recommends your first screen for asymptomatic Americans to happen at age 45. If you go in at age 45, and you have a negative result that is no cancerous lesions and no precancerous polyps or adenomas, you won't have another colonoscopy for 10 years until you're age 55. So it's a very slow-growing cancer. It's very easily identified through a colonoscopy, which is, as I mentioned, only has about a 5% false negative rate. But here, you can see the title of the slide is the compliance problem. Many, many Americans -- in fact, this is a problem globally, not just in the United States, many citizens globally do not like a colonoscopy, do not go for it. The other option outside the U.S. tends to be a fecal test, the fecal occult blood test and the fecal immunochemical test, FOBT and FIT, other common fecal tests that are often used outside the U.S. as frontline screens. And then if a person has a positive fecal test result, that person is then often sent for a colonoscopy, which is a definitive diagnosis. And this is a major problem if -- because you have a cancer that's asymptomatic in the early stages. So a person turns age 45 in the U.S. They don't have a colonoscopy. They're 50, they're 55, they're 60 and unfortunately, if that person does have colorectal cancer, and they didn't do a colonoscopy at age 45 or age 50, unfortunately, that cancer is probably growing and potentially metastasizing to other organs. If colorectal cancer is diagnosed in stage 1, 90% of people live more than 5 years. If you're diagnosed with colorectal cancer at stage 4, you have a 93% chance of dying in the next 5 years. So early detection is the key, modality is the problem. We think blood largely solves the modality problem because while many of us -- some of us may refuse the colonoscopy or delay and delay and delay that first or second colonoscopy, many of those same people would not refuse a blood test, right? If you're going in for your annual physical and you're having all of your associated blood work done, glucose, triglycerides, hepatitis, HIV, PSA and whatever you're being tested for, our blood test could simply be added as another blood test to that requisition form. So we think we would largely solve the compliance problem. Of course, if we have strong performance data, if we have high accuracy, i.e., low false negatives and/or low false positives. So it's a very large opportunity in the U.S. There are over 100 million Americans of screening age. In Europe, there are around 150 million Europeans of screening age. So again, really excited about this potential product in our pipeline, and we expect to announce some further data in colorectal cancer over the course of this year and/or next year. And I will next turn to Slide 23, you can see some of the clinical data that we've released there. The third circle or bubble has some data that we released recently in colorectal cancer. You'll see that we've also announced some good initial data in blood-borne cancers. You can see that fourth bubble in red, on the right. And then we've also released some clinical data in lung cancer. With lung cancer, it's a slightly different problem. For lung cancer, the frontline screen is often a low dose computer tomography, which is a scan of your lungs. And then if the doctor sees something suspicious on the scan, the doctor would often then prescribe a more invasive testing procedure, and that's often a lung biopsy. The problem with the lung biopsy is about 15% of the time, it causes a collapsed lung in that patient. So it's a risky procedure, obviously, invasive. If the doctors don't have to order a lung biopsy, that would obviously save those patients who don't have lung cancer, would have helped to reduce the false positive rate. And obviously, would increase productivity because people wouldn't be going in for lung biopsies that they don't need, that would reduce cost to the health care system. And obviously, those 15% of patients wouldn't be suffering from collapsed lungs and the complications that ensue from that. So what we are aiming to develop is not a frontline screen for lung cancer, but an adjunct test or a companion diagnosis. So a test that doctors could give either in advance of a low dose computed tomography or after getting the low dose computed tomography to aid in their diagnosis of that patient. So in other words, if doctor runs a low-dose computed tomography. And here she is looking at the image of a patient's lungs, but the doctor isn't really sure if some of those are suspicious -- some of those images are suspicious enough to warrant a lung cancer -- lung biopsy, the doctor could order a Volition blood test. And if that comes back positive, then the doctor would feel a lot more confident sending his or her patient on for the lung biopsy. So you can see some of the data that we've gotten here in lung cancer. So a lot going on for Volition. I think I'm getting down to the last few minutes, so I'll just focus on our veterinary product, and then I will open it up for a couple of minutes of questions, if there are any questions. So you can see here Volition Veterinary. On the next slide, you'll see that we formed a wholly-owned subsidiary, Volition Veterinary Diagnostic Development, LLC. We are working in collaboration with Texas A&M University in College Station, Texas. We granted Texas A&M the 12.5% equity ownership in our veterinary subsidiary, and we are working with Texas A&M to run clinical studies with the objective of developing a blood test to screen for some of the most common canine cancers. We had some good results a few months back. And you can see the market opportunity here is pretty significant. 25% of dogs will develop cancer at some stage of their lives. 6 million canine cancer diagnoses per annum in the U.S. alone compared to 1.7 million humans and pricing likely $100 to $200 per test. Our cost of goods -- regardless of the blood test that we're developing, our cost of goods tends to be under $10. So we have a very healthy gross profit margin at $100 to $200 per blood test. So again, very excited as we work together with Texas A&M here to commercialize a blood test, ideally to screen for some of the most common canine cancers. So very excited about that opportunity. We expect to have some additional data this year and into next year as we work to develop this product. What's advantageous for Volition is we don't require FDA approval for a blood test for canines. We go through the U.S. Department of Agriculture because it's for animal health, so we don't fall under the purview of the FDA, but the USDA. So that means generally, a faster path to market, less expensive and less clinical data required. So I will open it up to questions, a little bit on our key financials. Our ticker symbol is VNRX on the NYSE. American market cap has been around $150 million to $200 million. On June 26, we were added to the Russell Microcap and the Russell 3000 Indices, monthly burn about $1.7 million, cash on hand at the end of June, $21.3 million. That excludes about $4.7 million that we raised through our ATM facility, and we have 5 analysts who cover Volition. So I will open it up to the Q&A session. I think all of you should be able to enter questions on your dashboard and operator, I'll leave it up to you to let me know what we need to finish, but...

Well, we have actually a couple of questions already submitted. The first is about your product, the blood cancer product. This person would like to know how many assays would you need to get to -- get a CE Mark before you have an actual product to bring to market?

We've already CE Marked one assay a few years ago. Most of our products would require anywhere from 1 to 5 assays. So it really depends on the product. The colorectal cancer blood test tends to require more biomarker assays, the COVID-19, I think, is likely to be 2. One of those components has been CE Marked already. And we -- for the COVID-19 test, we would hope to have the other component CE marked by the end of this year.