VolitionRx Limited (VNRX) Earnings Call Transcript & Summary

We are VolitionRx. Ticker is VNRX on the New York Stock Exchange/American Stock Exchange. I will be making some forward-looking statements, so I do point you to the forward-looking statements and disclaimer. And a little bit about Volition. Our mission is simple: we want to save lives. We are a diagnostics company, developing blood tests to screen primarily for different cancer types. But as Gilbert mentioned, we are also developing a blood test for a noncancer indication of COVID-19, and I'll talk a little bit about that product because the coronavirus is front and center for most of us these days. So here, you can see a little bit about our COVID-19 product development in developing a blood test for this particular virus. We are not developing a frontline blood test for the coronavirus. There are a number of FDA-approved frontline screens for the coronavirus already in use in the United States. What we are planning to develop is a triage or a risk stratification blood test to be given to patients who have had positive results on their coronavirus test. The reason that this product is, we think, particularly useful is that currently, once a patient has been diagnosed with the coronavirus, really the only way for doctors, nurses and that patient to be able to tell if that patient will develop the severe symptoms of COVID-19 are basically by observation once the patient has become symptomatic. We are hoping to develop and commercialize a blood test that can be given ideally to a patient immediately after testing positive for the coronavirus, and by looking at biomarkers in that patient's blood, total nucleosomes and also citrullinated nucleosomes that we would ideally be able to tell, based on the quantity of each of those biomarkers in a person's blood, whether or not that patient is likely to develop a mild or no symptoms of COVID-19, moderate symptoms or the severe symptoms. And we are in the process of arranging our final studies in this regard, and they are going to be longitudinal studies. What I mean by that is we already know from data that we released a couple of months ago that those patients who have the coronavirus and also have high levels of nucleosome debris in their blood, one of our biomarkers, and those patients who also have high levels of citrullinated nucleosomes in their blood are also the patients that had the most severe symptoms of COVID-19. So we already know that there is a strong linear correlation between the quantity of nucleosomes and citrullinated nucleosomes and the severity of symptoms from COVID-19 that a patient faces. What we don't know and what our final study or studies aim to show is how far in advance, if at all, of the onset of symptoms from COVID-19 are these markers detectable in a person's blood. Therefore, if we find that we can see these markers in the patient's blood 12, 24, 36, 48, 72 hours prior to the onset of severe symptoms, then we feel like we have a very valuable and useful prognostic tool. Because rather than the current method of treating patients, which is waiting for them to have to demonstrate symptoms -- severe symptoms of the coronavirus and then trying to get that person to the hospital and get the medical resources that he or she needs, we potentially could enable doctors and nurses and patients themselves to have a tool to test immediately after testing positive for the coronavirus to then determine whether or not that patient's likely to develop the severe symptoms of the coronavirus. Therefore, the patient could get immediately admitted to the hospital prior to the onset of symptoms, start to receive hospital medical treatment. Perhaps it's a ventilator oxygen, at least at a hospital bed, and receive perhaps some therapies that would moderate or mitigate and reduce damage from the severe symptom onset that will occur in the next few days. So we're really excited about this potential product. We are hoping to arrange one or more clinical studies looking at the longitudinal data this month or next month. And we hope to have data from that study or studies by the end of this year. And then our goal would be to aim to commercialize this product in Europe and/or the U.S. late 2020 or early 2021. So again, really excited about this particular opportunity. We also believe, as we mentioned on our earnings call, that this blood test could also have prognostic power for other respiratory illnesses, namely pneumonia and influenza. And so some investors have said, "Well, if the coronavirus -- if there's a vaccine for the coronavirus or its infection rate abates substantially, would our product be obviated or made obsolete?" We think that, again, because we believe we have the ability to triage or risk stratify for other respiratory illnesses, we think that this could -- this product could be particularly useful in the future for pneumonia and influenza. So we expect to have additional data and news on this blood test over the course of 2020. And moving next to some other data that we expect over the course of 2020. You can see here in the bottom right in red, you can see some of the results that we announced earlier this year in blood-borne cancers or hematological cancers. And you can see from these results, we had a cohort of 54 subjects looking at a number of common blood-based cancers. And we were at an area under the curve of 91%. So we were able to identify a very significant number of individuals with a number of blood-borne cancers with very high accuracy. So we are continuing to work in this space, and we are hopeful as well to have additional data in a variety of blood-borne cancers again by the end of this year in somewhat larger clinical studies than this one here. So there really aren't a lot of good diagnostic tools available for many blood-borne cancers. So again, this would be a very useful blood test if we're able to replicate or improve upon results. And we expect to have additional data before the end of 2020. And I will turn now towards -- to animal health because we have made a lot of progress with our first animal health product working in collaboration with Texas A&M University in College Station, Texas. So let me turn here to Volition Veterinary. And I'll just pause for a second so that the translator can catch up. Here she needs a moment to catch up. And I'll just turn to the next slide. So some of you can start reading the material on the next slide. As I mentioned, we are working with Texas A&M University's Veterinary College of Medicine to develop a blood test to screen for some of the most common cancers in canines or dogs. We formed a wholly owned subsidiary about 1 year ago called Volition Veterinary Diagnostics Development LLC, and we granted 12.5% equity ownership in that subsidiary to Texas A&M University. In return for granting them 12.5% equity ownership, Texas A&M will run several clinical studies looking at canines. They -- the university, if the data is strong, will ideally begin to sell our blood test through their reference lab at the Veterinary College of Medicine at Texas A&M University. The university will help us register the product with the U.S. Department of Agriculture, the USDA. For veterinary health, we don't have to go through the Food and Drug Administration, the FDA, in the U.S.A. Because it's an animal health product, the supervisory body is the USDA. So it's a -- it tends to be a faster, less expensive process to get a product to market going through the USDA. And once we're hopefully able to register this product with the USDA, Texas A&M would introduce us to one or more licensing partners to try and launch the product nationwide. So you can see some really interesting statistics here. You'll see that in the center of the slide, 25% of dogs will develop cancer at some stage in their lives. And in the U.S. alone, 6 million canines are diagnosed with cancer per year compared to 1.7 million humans. And Texas A&M is telling us that pricing could be $100 to $200 per test. Our cost of goods for most of our products is under USD 10. So we have very good gross margins on most of our products. So we announced data here on this slide. And I'll pause again to hopefully have the translator catch up. But you'll see on this slide, at the very top, some of the data that we got a couple of months ago. We used a single biomarker and looked at a number of canines, and we looked at 3 common canine cancers. And for canine lymphoma and canine hemangiosarcoma, you'll see that we detected 70% of those dogs with these 2 cancer types at specificity of 90%, which means a 10% false positive rate. So very good accuracy for a blood test, really excited about these early results that we achieved with Texas A&M University a couple of months ago. We are continuing to both look at additional canine cancers beyond hemangiosarcoma and lymphoma, and we are looking to see if by adding additional biomarkers we can improve upon the already very remarkable performance of our blood test. So we expect to have additional data over the course of the coming months. I've presented several times at the GCFF conference, so some of you are familiar with our other clinical work. I won't spend too much time on it because I think we're getting down to the last few minutes. But a lot of you know Volition for the work we've done in colorectal cancer and lung cancer. You can see some of the results here on this slide that we've achieved over the last couple of years. So again, getting really good results in both lung and colorectal cancer, and we expect to have additional data late this year or into the first half of next year in both our lung and colorectal cancer programs in Europe and in Asia. We have several studies underway in lung cancer and colorectal cancer at National Taiwan University in Taipei. So we expect to have additional data, most likely in the first half of next year. And before I open it up to Q&A, I'll just go to our financial snapshot slide. And you can see here, we're listed on the NYSE/American Stock Exchange. Ticker is VNRX. Our market cap has been in the USD 150 million to USD 200 million range for the past year or so. You can see our 52-week range. We're earning about USD 1.7 million per month. As of the end of the second quarter of 2020, we had USD 21.3 million in cash. And then after the quarter closed, we raised another $5 million or so through an ATM facility. So we have a very comfortable cash position, just under 2 years' worth of cash. And we have a lot of clinical data and milestones over the course of 2020 and 2021. So we expect investors to focus on the clinical data as we report additional data for our blood tests in COVID-19, our blood-borne cancer tests, our veterinary blood test and lung and colorectal cancer. So I think I should stop there. Again, VNRX on the NYSE American. We have 5 analysts covering the company and very strong insider ownership, about 20% insider ownership and about 20% institutional ownership in Volition. So I think I'll stop there and open it back up to Gilbert to see if there are any questions for me. And thanks again for joining today.

Yes. Thank you, Scott, for your time here. We've got a few questions here. I'd like to go to see we've got time here. The first one, I'd like to ask them together. There's a fund from the Chinese feed here asking you about the COVID-19 test, I believe, the new product. What sort of expecting time line here? And then along with the -- another question similarly, he was asking you, is that your main focus right now? Or your other product, this is just an add-on? From [ Brian Burton ] this is, so I just want to ask them together.

Sure. Thanks, Gilbert. So time line, we are in the process of organizing longitudinal studies, and these will be our final studies that we expect in order to get a product into the marketplace. So we're hopeful to announce one or more of these studies in September, October this year, have data before the end of the year. And we're hopeful that the -- in the U.S., the FDA will grant us Emergency Use Authorization or EUA for our triage blood test. And we're hopeful that the EUA would do something similar, Emergency Use Authorization. So the FDA has already given EUA to the LabCorp Pixel test to the Rutgers/Vault saliva test, both the frontline screens for the coronavirus. And they just approved that convalescent plasma therapy. So there is precedent, the FDA has already granted EUA, Emergency Use Authorization, for a number of products here in the U.S. related to the coronavirus. We're hopeful that the EUA would do the same. In terms of our focus, this blood test is a major focus for us because there's an immediate need for this. And the regulatory pathway is much faster and cleaner given the pandemic. And our other focus has been on the vet product with Texas A&M University and on the blood-borne cancers. So those are really the 3 products that we expect to have data from, and we're hoping to move quickly into commercialization for all 3 of these products.

Yes. So we're running a bit out of time now, so I'll just ask one more question before you go. So someone from the Chinese feed [indiscernible] asked you, so you signed a partnership with Fosun, a big company in China last year? So how did that go through about the partnership?